United States Trade Representative (USTR) Katherine Tai announced on Wednesday 2 June that there would be an immediate and temporary suspension of the trade sanctions that the US intends to impose on six countries, including Spain, Italy and Austria, because of the taxes they are levying on digital services.
After a year-long investigation (see EUROPE 12636/26), the USTR has concluded that the taxes adopted by these three European countries – as well as by India, Turkey and the United Kingdom – are “unreasonable or discriminatory and that they impede or restrict U.S. trade”.
As a result, the USTR announced its intention to slap an additional 25% tariff on certain imports from these countries, but immediately suspended said tariffs until 29 November 2021 in order to give the ongoing OECD negotiations (see EUROPE 12727/23) a chance to succeed.
“The United States remains committed to achieving a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress, while maintaining the option of imposing tariffs [...] if warranted in the future”, explained the USTR in a statement.
The aim is to obtain an agreement in principle over the whole reform, firstly at the meeting of the G7 Finance Ministers on 4-5 June in London, and then at the ‘G20 Finance’ meeting to be held on 9-10 July in Venice. (Original version in French by Marion Fontana and Mathieu Bion)