We study optimal commodity taxation in an open economy with monopolistic competition and asymmetric scal capacity. In a two-country model, a supranational authority uses destination-based consumption taxes to nance public spending, correct market distortions, and redistribute across countries. We show that in the rst-best, domestically produced goods are always subsidized, while cross-border tax di erentials emerge based on relative labor valuations. In the second-best, when lump-sum transfers are unavailable, the optimal tax system resembles a pattern of asymmetric tari s: goods from countries with lower marginal costs of public funds are subsidized, while more competitive trade directions are taxed. These results challenge the conventional neutrality of VAT under trade liberalization and suggest that di erentiated tax treatment by origin can improve welfare. Our ndings call for a reassessment of uniform VAT regimes, especially in economically asymmetric unions.