Background

Additional tariffs on $2.1 billion worth of imports from six countries could be imposed this fall if multilateral talks on an international taxation agreement do not resolve U.S. concerns about digital services taxes.

The Office of the U.S. Trade Representative has concluded that DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom have discriminated against U.S. digital companies, are inconsistent with principles of international taxation, and burden U.S. companies. As a result, USTR has determined to impose additional 25 percent tariffs on imports of the following.

- 23 tariff subheadings from Austria with an estimated trade value of $65 million

- 26 tariff subheadings from India with an estimated trade value of $119 million

- 44 tariff subheadings from Italy with an estimated trade value of $386 million

- 27 tariff subheadings from Spain with an estimated trade value of $324 million

- 32 tariff subheadings from Turkey with an estimated trade value of $310 million

- 67 tariff subheadings from the United Kingdom with an estimated trade value of $887 million

However, USTR is also suspending the imposition of these tariffs through Nov. 28. Members of the Organization for Economic Cooperation and Development and the G-20 are currently engaged in talks aimed at reaching a multilateral agreement on international taxation, including DSTs, and USTR said the tariff suspension is aimed at allowing additional time for these talks to reach a successful conclusion.

USTR has previously terminated investigations involving Brazil, the Czech Republic, the European Union, and Indonesia after determining that they had not implemented the DSTs under consideration. USTR has also indefinitely suspended tariffs on imports from France aimed at responding to its DST.

For more information on potential tariffs in this dispute and ways to mitigate their impact, please contact Nicole Bivens Collinson (at (202) 730-4956 or via email) or Kristen Smith (at (202) 730-4965 or via email).

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