Source : INDIA TODAY NEWS
US President Donald Trump on Friday threatened to impose a 100 per cent tariff on imports from any country that brings in a digital services tax on American companies. In a post on social media, he said countries planning such taxes would face the penalty immediately.
The warning comes ahead of Trump’s July 4 deadline for the United States and the European Union to begin implementing a tariff deal that caps tariffs on most EU exports at 15 per cent. Digital taxes were not part of that agreement and have remained a point of disagreement between Washington and the European bloc.
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Trump said European countries were discussing the “imminent” implementation of taxes on US companies. “Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100 per cent TARIFF on any and all Goods sent to the United States of America,” he wrote. He added that the new move would supersede any previously negotiated trade deals. While he said the penalty would apply to any country that goes ahead with such a tax, he singled out European nations in his post.
Trump has repeatedly opposed foreign efforts to tax or regulate major American technology companies. Last year, he also threatened new tariffs on countries that moved in that direction. In a post last August, he said digital taxes and regulation “are all designed to harm, or discriminate against, American Technology”.
Many countries have looked at such taxes as their economies increasingly operate in digital spaces dominated by American companies. In the past, the US government has carried out tariff investigations into digital services taxes under Section 301 of the Trade Act of 1974. It was not immediately clear how Trump would carry out his latest threat, or whether the tariffs would be imposed widely or first aimed at specific countries.
The European Union finalised its trade deal with the United States in May after months of discussion within the bloc. European Commission chief Ursula von der Leyen had tentatively struck the deal last year while visiting Trump’s golf course in Scotland.
Britain, which is no longer part of the EU, has imposed a 2 per cent digital services tax since 2020 on revenues earned by search engines, social media sites and online marketplaces that “derive value” from UK users. The British government said at the time that corporate tax rules for digital businesses had “led to a misalignment between the place where profits are taxed and the place where value is created”. It also said the thresholds in the tax meant that mainly large international companies would pay it, and that the measure was designed to “ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services”.
In essence, Trump’s latest warning links digital services taxes directly to steep import tariffs, with Europe in focus even as the US and EU prepare to roll out their separate tariff agreement.
With PTI Inputs
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SOURCE :- TIMES OF INDIA
