President Donald Trump revealed his most sweeping economic measure yet Thursday, announcing reciprocal tariffs that could come as soon as this spring, which Trump argues would level the playing field in global trade—though economists project they would increase inflation this year.

He’s made clear that includes value-added taxes, or VATs, which is the way most countries—including the entire rich world apart from the United States—taxes consumption. Still, Trump blames the VAT for the U.S. trade deficit with the European Union, which hit $236 billion in 2024, according to the Census Bureau, second only to China.

European Union chief Ursula von der Leyen vowed that U.S. tariffs on steel and aluminum “will not go unanswered” and will trigger tough countermeasures from the 27-nation bloc.