Americans for Tax Reform (ATR) supports the U.S. Trade Representative’s announcement regarding the implementation of tariffs against six countries as a measure to counter discriminatory Digital Services Taxes (DSTs). While tariffs are economically damaging, the U.S should not stand idly by while foreign countries take advantage of American workers and businesses.
While the ultimate goal should be lower trade barriers, USTR should not hesitate to proportionally respond to foreign efforts to take aim U.S. families and businesses.
Today, USTR announced and then immediately suspended the implementation of tariffs against Austria, India, Italy, Spain, Turkey, and the United Kingdom. The tariffs will be suspended for up to 180 days in order to provide sufficient time for multilateral negotiations to take place at the OECD.
Digital Services Taxes discriminate against U.S. companies and have the potential to cause significant harm to the U.S. tax base. This most recent announcement by USTR followed yearlong Section 301 investigations into the six countries, originally initiated by the Trump Administration and then continued under the Biden Administration. It is crucial that the Biden Administration maintains the goal of finding a strong remedy for foreign DSTs.
Today’s announcement was an important move by USTR to ensure that negotiations at the Organization for Economic Cooperation and Development (OECD) must continue. Unfortunately, this warning about the potential for future tariffs is not strong enough to discourage the six named countries from proceeding with their unilateral DSTs before OECD negotiations conclude.
“The U.S. is not responding forcefully enough to countries that are relentless in extracting revenue from the U.S. and have been discriminating against U.S. companies. The Biden Administration is relying on the false hope that international rules will be sufficient to end unilateral measures, but the Europeans don’t have anything to lose or to fear,” said ATR President Grover Norquist.
Furthermore, this announcement should indicate to other countries that are also pursuing DSTs, such as Canada and the Czech Republic, that they would be better served by following international negotiations instead of moving forward with their unilateral DSTs. USTR must act in order to prevent the unfair exploitation of American companies and taxpayers.
The Biden Administration and USTR must continue to hold firm and ensure that other national governments seek out multilateral solutions that do not allow for discriminatory DSTs against American companies and workers.