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Business News/ News / World/  US to retaliate on digital taxes with $1 bn tariff
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US to retaliate on digital taxes with $1 bn tariff

Goods entering the US could face tariffs of as much as 25% annually, according to the US Trade Representative

The US’ move is in response to tax impositions on tech firms like Amazon. reutersPremium
The US’ move is in response to tax impositions on tech firms like Amazon. reuters

The US is pressing ahead with plans to hit six nations that tax internet-based companies with retaliatory tariffs that could total almost $1 billion annually.

Goods entering the US, ranging from Austrian grand pianos and British merry-go-rounds to Turkish Kilim rugs and Italian anchovies, could face tariffs of as much as 25% annually, documents published by the US Trade Representative show. The duties are in response to countries that are imposing taxes on technology firms that operate internationally such as Amazon.com Inc. and Facebook Inc. In each of the six cases, the USTR proposes to impose tariffs that would roughly total the amount of tax revenue each country is expected to get from the US companies.

The cumulative annual value of the duties comes to $880 million, according to Bloomberg News calculations.

There have been efforts to replace each individual country’s digital taxes with one global standard, to be brokered by the Organization for Economic Co-operation and Development (OECD), but a deal has yet to be reached.

The US says it’s committed to the OECD process, but will maintain its options, including tariffs, in the meantime, USTR Katherine Tai said in a statement on 26 March.

The Internet Association, whose members include Amazon, Facebook and Alphabet Inc.’s Google, welcomed the USTR’s move.

The USTR’s action “is an important affirmation in pushing back on these discriminatory trade barriers as the US continues to work to find a viable solution at the OECD," the group said in a statement.

The USTR has invited public comment on its plans to go ahead with the tariffs, and will hold public hearings at the start of May.

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Published: 05 Apr 2021, 11:56 PM IST
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