The US is pressing ahead with plans to hit six nations that tax internet-based companies with retaliatory tariffs that could total $1 billion annually.
Goods entering the US could face tariffs of as much as 25 percent annually, documents published by the US Trade Representative show. The duties are in response to countries that are imposing taxes on technology firms that operate internationally such as Amazon and Facebook.
The USTR proposes to impose tariffs that would total the amount of tax revenue each country is expected to get from the US companies. The cumulative annual value of the duties comes to $880 million.
Most of this is is because efforts to replace each individual country’s digital taxes with one global standard, brokered by the Organisation for Economic Cooperation and Development has not reached an agreement yet.
The US says it’s committed to the OECD process, but will maintain its options, including tariffs, in the meantime, USTR Katherine Tai said in a statement on March 26.
The Internet Association whose members include Amazon, Facebook and Google welcomed the USTR’s move.
The USTR’s action “is an important affirmation in pushing back on these discriminatory trade barriers as the US continues to work to find a viable solution at the OECD”, the group said in a statement.