U.S. President Donald Trump announced on Friday his intention to impose retaliatory tariffs on countries that levy digital taxes on American tech companies. When questioned about signing an order related to digital taxes, Trump responded affirmatively, stating, \"We are going to be doing that, digital. What they're doing to us in other countries is terrible with digital, so we're going to be announcing that.\"
A White House fact sheet released earlier this month highlighted the issues, stating, \"Though America has no such thing, and only America should be allowed to tax American firms, trading partners hand American companies a bill for something called a digital service tax.\" The fact sheet further noted, \"Canada and France use these taxes to each collect over $500 million per year from American companies,\" adding that these non-reciprocal taxes cost America's firms over $2 billion annually.
In recent years, several European countries have actively pushed for digital taxes on large tech companies like Google, Amazon, Apple, and Meta. These moves have been met with strong opposition from the United States. During Trump's first term, he initiated a \"301 investigation\" into the digital services taxes of several trade partners, accusing these measures of unfairly targeting American businesses.
Following Joe Biden's inauguration, the United States reached a compromise with Austria, Britain, France, Italy, and Spain in October 2021 regarding the digital services tax dispute. The agreement was to be resolved under the framework of the Organization for Economic Cooperation and Development (OECD)'s global tax deal. However, upon returning to office, Trump signed a presidential memorandum on January 20, declaring that the global corporate minimum tax deal under the OECD framework had \"no force or effect\" in the United States, effectively withdrawing from the agreement negotiated by the Biden administration with nearly 140 countries.
Reference(s):
cgtn.com
