WASHINGTON – The US Trade Representative (USTR)’s Office on Wednesday claimed that digital service taxes (DSTs) adopted by India, Italy and Turkey discriminate against American companies and are inconsistent with the prevailing principles of international taxation.
“USTR is not taking any specific actions in connection with the findings at this time but will continue to evaluate all available options,” the USTR’s Office said in a statement after releasing findings of its Section 301 investigations into DSTs.
The USTR expects to announce the progress or completion of additional digital service taxes investigations in the near future, according to the USTR’s office.
In June 2020, the United States initiated Section 301 investigations into DSTs considered by 10 US trading partners, including the European Union, Brazil and India.
The United States was due to start imposing 25-percent additional tariffs on about $1.3 billion worth of French products on Wednesday in response to France’s DSTs that impact major US technology companies. It’s not clear whether these tariffs would take effect as scheduled.
The so-called Section 301, under an outdated US trade law adopted in 1974, allows the US president to unilaterally impose tariffs or other trade restrictions on foreign countries.
The global trading community has become increasingly concerned that the US government’s frequent use of Section 301 would go against the World Trade Organization rules, undermine the multilateral trading system and disrupt the global supply chain.