The U.S. imposes $2 billion in tariff threats on 6 countries over digital taxes

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The United States is threatening to impose tariffs on US$2 billion worth of goods from the United Kingdom and five other countries because of how they impose taxes on technology companies. This move may reignite the transatlantic trade war unless the parties discuss a broader international trade war. Tax treaties resolve tricky negotiations.

Office of the United States Trade Representative Say It is imposing tariffs on Austria, India, Italy, Spain, Turkey, and the United Kingdom, but immediately suspended it for six months because it ended a series of investigations into how these countries impose taxes on American technology giants.

The announcement comes as the rich countries are updating International taxation systemThe Biden administration proposes to give advanced economies the power to increase corporate taxes for US technology companies and other large multinational companies, and to set the world’s lowest corporate tax.

The government that introduced the taxation of “digital services” argued that technology companies paid too little tax on their profits in many countries, partly because they were recorded in low-tax jurisdictions such as Ireland. Washington stated that these taxes are unfair because they have a disproportionate impact on American companies.

U.S. Trade Representative Katherine Tai said that the six-month suspension of tariffs will allow more time for international tax negotiations to continue, but will allow the United States to maintain “the option of imposing tariffs.” .. If there is a guarantee in the future”.

The Biden administration put forward a new proposal to reform the international tax system in April in an attempt to break deadlock In the tax negotiations held by the OECD.

The US proposal would tax the global profits of the largest companies, including large US technology groups, regardless of their actual presence in a particular country.It also seeks a at the lowest limit The global corporate tax rate is 21%, although the United States has recently indicated that it will accept a minimum tax rate of 15%.

If there is no agreement to lift the new tariffs, the United Kingdom will be hit hardest by the new tariffs. The value of British exports to the United States each year is US$887 million and a 25% tariff is imposed. Target products include perfume, cosmetics, clothes, jewelry and video games.

The U.S. has suspended 25% tariffs Worth 1.3 billion U.S. dollars French handbags and cosmetics initially threatened to impose 100% import duties on champagne and cheese.

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