Late last month, the Biden administration signaled that it was preparing to slap a 25 percent tariff on goods imported from six countries, including the United Kingdom, in retaliation for a digital service tax those countries were set to collect on search engines, social media companies and online retailers that were mostly American.
The Office of the U.S. Trade Representative said a six-month investigation had found that the digital tax levied by the U.K. and other countries was “unreasonable, or discriminatory and burdens or restricts U.S. commerce.”
In addition to the U.K., the countries that have adopted such taxes are Austria, India, Italy, Spain and Turkey. Their actions were discriminatory, the USTR found, after conducting so-called Section 301 investigations. Others, including Brazil, the Czech Republic, the European Union and Indonesia, are considering similar proposals but have yet to adopt them.
During the Trump administration, the USTR also investigated France’s digital service tax and determined that it was discriminatory and recommended retaliatory tariffs, but it suspended implementation pending an ongoing negotiation under the aegis of the Organization of Economic Cooperation and Development and the G-20 group of countries.
The Internet Association, a trade group that represents top online companies, said in a statement that it backed the USTR’s move to propose retaliatory tariffs on goods and services imported from Austria, India, Italy, Spain, Turkey and the U.K.
