This is not what VAT is. Import duty is separate. VAT is paid on EVERY step when the product is sold/resold. So the wholesaler pays VAT when buying a product from the manufacturer, then a local shop is paying VAT while buying the product from the wholesaler, and then the customer is paying VAT once again while purchasing the product. Oh,and if the value of the product is over a certain value, they need to pay VAT again if they want to resale the product to somebody else as well! So you end up paying VAT even several times in this chain from manufacturer to the customer.
While technically true, this is a bit misleading since VAT is often quoted as the total amount (say "15% VAT") and this is not what is charged at each step (as would happen with a pyramiding gross excise tax). Instead what happens is the VAT is split up and a portion of it is collected at each step.
Yes, I know what VAT is. The US does not have VAT, and would need either an import duty or a requirement that sales tax be paid on imports for the situation to be equivalent to the EU... and that is not part of the bill AFAIK.
