Colombia Attacks American Companies With Digital Tax

The administration of Colombia’s President Gustavo Petro attacks America’s successful tech companies with Digital Services Taxes, so-called DSTs, and import tariffs. The new Colombian measures are modeled after the European Union’s proposals with striking similarity. With the United States being the largest investor in the Colombian economy, this is yet again a blatant case of discrimination and an easy money grab at the expense of the United States.

Colombia imposes a 5% Digital Tax on all gross income from the sale of goods, mainly targeting American tech companies. This anti-American coercion is trying to limit fair competition for American companies in the Colombian economy, will increase prices for Colombian consumers and businesses, and limit their choice of products and services.

Furthermore, Colombia is trying to hurt strong foreign competitors with high discriminatory tariffs. This matter has to be on the Biden administration’s agenda, especially now with Colombia’s latest attack: Colombia Extends 40% Tariffs on clothing & garment imports. The tariffs that Colombia is now also imposing on other economic sectors are hurtful to free international trade, the bilateral agreement, and fair competition. Colombia’s government is undermining the spirit of the United States-Colombia Trade Promotion Agreement (USCTPA) as tax bill No. 118 of 2022 was released. It contains discriminatory requirements for U.S. companies investing in and exporting to Colombia. 

The Biden administration should immediately react to Colombia’s newest populist trends by launching an investigation under the US Section 301 trade act which would enable the United States Trade Representative (USTR) to ​enforce U.S. rights under trade agreements and respond to discriminatory trade practices. The Biden administration needs to step up its game and defend American interests.