US sets and suspends six-country tariffs on digital taxes
The United States on Wednesday announced 25% tariffs on more than $ 2 billion in imports from six countries on its digital services taxes, but immediately suspended tariffs to allow time for tax negotiations international organizations to continue.
The Office of the United States Trade Representative (USTR) said it had approved threats of tariffs on goods from Britain, Italy, Spain, Turkey, India and India. Austria after a “Section 301” investigation found their digital taxes discriminated against US businesses.
The USTR has published lists of imports from the six countries that would be subject to tariffs if international tax negotiations fail to reach a solution that prohibits countries from imposing unilateral taxes on digital services.
The USTR said it would impose tariffs of 25% on about $ 887 million of goods from Britain, including clothing, overcoats, shoes and cosmetics, and on about $ 386 million. dollars of goods from Italy, including clothing, handbags and optical lenses. The USTR said it would impose tariffs on goods worth $ 323 million from Spain, $ 310 million from Turkey, $ 118 million from India and $ 65 million from Austria.
The potential tariffs, based on import data from 2019, aim to match the amount of digital taxes that would be collected from U.S. companies, an official at USTR said.
The move underscores the threat of retaliation from the United States as financial leaders from G7 countries prepare to meet in London on Friday and Saturday to discuss the state of tax negotiations, including the taxation of large tech companies and ‘a US proposal for a global minimum corporate tax.
The American tariffs threatened against France for its digital tax were suspended in January to allow time for negotiations.
US Trade Representative Katherine Tai said she was focusing on “finding a multilateral solution” to digital taxes and other international tax issues and was committed to reaching consensus within the framework. of the OECD and G20 negotiations.
“Today’s actions allow time for these negotiations to continue moving forward while retaining the ability to impose Section 301 tariffs if warranted in the future,” Tai added.
Tai faced a deadline Wednesday to announce the tariff action, or statutory authority under Section 301 investigations would have expired, a year after they were opened by the Trump administration.
A UK government spokesperson said the UK tax was meant to ensure tech companies pay their fair share of tax and was temporary.
“Our digital services tax is reasonable, proportionate and non-discriminatory,” the spokesperson said. “It is also temporary and we are working positively with international partners to find a comprehensive solution to this problem. We will remove DST when this is implemented.”
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