The US has announced plans to impose trade tariffs against goods from Austria, India, Italy, Spain, Turkey and the UK in response to their digital service taxes affecting mainly American companies. However, the tariffs are suspended for the moment, in order to allow multilateral negotiations on a new international tax framework to continue at the OECD and G20.
The announcement comes ahead of a key meeting of G7 finance members this week on the proposals to agree a minimum tax rate for multinational companies. The US has been investigating the countries for a year after they imposed the digital taxes, amid concerns the levies discriminate against American firms.
The amount of the proposed tariffs is based on the expected impact of the tax on US firms. For example, they are expected to pay USD 325 million annually under the UK's 2 percent tax, while the duties of up to 25 percent will affect around USD 887 million in goods from the UK.
The US Trade Representative announced the measures and said the tariffs would be on hold for up to 180 days. The proposed tariffs would affect USD 65 million worth of Austrian goods based on trade in 2019, USD 119 million worth of Indian goods, USD 386 million worth of Italian goods and USD 310 million worth of Turkish goods.
