Trump administration revives trade war over digital taxes
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The news: US President Donald Trump has ordered the US Trade Representative (USTR) to revive investigations into digital service taxes (DSTs) imposed by foreign governments on US technology companies.
Trump on Friday (Saturday AEDT) signed an executive order directing his administration to consider tariffs and other actions "to combat the digital service taxes (DSTs), fines, practices and policies that foreign governments levy on American companies," a White House official told Reuters.
The White House memo also instructs the USTR to examine whether any European Union or British policies “incentivises” US companies to adopt products or technologies that restrict free speech or promote censorship.
The context: DSTs, which target major US firms like Google, Meta, Apple and Amazon, have been a longstanding trade irritant for the US.
Countries including Britain, France, Italy, Spain, Turkey, India, Austria and Canada have imposed such taxes. During Trump's first term, USTR found them discriminatory, paving the way for retaliatory tariffs.
In 2021, Biden’s trade chief, Katherine Tai, announced 25% tariffs on over USD2 billion ($3.15 billion) worth of imports from six countries but suspended them for global tax negotiations, which stalled.
The White House also said it will closely examine how US companies are affected by the EU's Digital Markets Act and Digital Services Act.
The sources: White House fact sheet, Reuters
