The president says the VAT system used across Europe gives other countries unfair trade advantages. Here’s how the system started.

President Donald Trump’s sweeping tariff threats have been touch and go. As it stands currently, the 25 percent tax on goods from Mexico and Canada is on ice for a month, but a 10 percent tariff on Chinese goods is set to take effect on Tuesday, via an executive order of questionable legality.

While a sales tax is paid in full by the consumer at the point of sale, a value-added tax is collected as the product moves through the supply chain. To borrow an example from The