The United States is investigating digital services taxes being adopted or considered by Britain, Italy, Brazil and other countries, the U.S. Trade Representative's office said on Tuesday, a move that could lead to new punitive tariffs and heighten trade tensions.
“President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies,” U.S. Trade Representative Robert Lighthizer said in a statement. “We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.”
Trump based his nearly two-year trade war with China on a probe into Beijing’s intellectual property and technology transfer practices under Section 301 of the U.S. Trade Act of 1974, which authorizes action, including tariffs, to end foreign government practices that curb U.S. commerce. In a Federal Register notice, the USTR said the probe would cover digital services taxes adopted or under consideration by Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey and Britain. The trade agency said it has requested consultations with these governments.
The Internet Association industry trade group said the probe was needed since a growing number of countries had proposed or enacted digital taxes despite the OECD negotiations.
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