On April 30, the U.S. Chamber submitted comments to the Office of the U.S. Trade Representative in response to the agency’s Federal Register notices on Digital Services Taxes (DSTs) imposed by Austria, India, Italy, Spain, Turkey, and the United Kingdom. USTR has now determined that the DSTs imposed by the six countries are indeed actionable under Section 301 of the Trade Act and has further identified merchandise imports from the six countries in the amount of approximately $880 million on which it proposes to impose tariffs. USTR solicited input on whether imposing increased duties on the particular products identified would be practicable or effective to obtain the elimination of the DSTs.
The Chamber’s comments address how DSTs pose a risk to the global economic recovery given the outsized importance of digitization and the potential growth in global services trade. The submission urges USTR to press the six countries to drop their DSTs and focus their efforts on the multilateral negotiations taking place under the aegis of the OECD to address global tax issues, including those relating to digitization. The Chamber concludes by reiterating a point included in its comments to USTR last year: “The application of Section 301 tariffs to goods from these countries presents risks for the economy. Unilateral taxes and tariffs put economic growth and job creation at risk.”