US threatens to impose TARIFFs on six countries for taxing US tech companies

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Carousels from Britain, basmati rice from India and handbags from Italy: The US threatened to impose tariffs on $2 billion worth of products from six countries on Wednesday in response to its taxes on US tech giants.

The problem is the turbulent relations between Washington and other countries that are outraged at how companies like Google and Facebook can cut local taxes by registering their profits in low-tax jurisdictions like Ireland.

The result has been an easing of US financial muscle barely a week before world leaders gather in the UK for a G7 summit.

US Trade Representative Katherine Tai announced that her office imposed tariffs on Austria, India, Italy, Spain, Turkey and the UK, but immediately suspended them for six months to allow negotiations to continue.

Carousels, shooting galleries, boat swings, traveling circuses and menageries imported from Britain would all be hit by a 25 percent tariff if Washington and the world's capitals can't agree on how internet giants like Facebook, Google and Amazon can best be taxed

Carousels, shooting galleries, boat swings, traveling circuses and menageries imported from Britain would all be hit by a 25 percent tariff if Washington and the world’s capitals can’t agree on how internet giants like Facebook, Google and Amazon can best be taxed

The list of sanctions includes carpets from Turkey, as well as stone monuments and bedding

The list of sanctions includes carpets from Turkey, as well as stone monuments and bedding

US Trade Representative Katherine Tai has imposed and suspended tariffs on exports from Austria, India, Italy, Spain, Turkey and the UK, as part of an ongoing row with other countries over how to tax the huge profits of digital giants like Facebook and Google. .

US Trade Representative Katherine Tai has imposed and suspended tariffs on exports from Austria, India, Italy, Spain, Turkey and the UK, as part of an ongoing row with other countries over how to tax the huge profits of digital giants like Facebook and Google. .

“The United States is focused on finding a multilateral solution to a range of important issues related to international taxation, including our concerns about taxes on digital services,” she said.

The example of Amazon’s European company, which has failed to pay corporate taxes despite a record turnover of $54 billion, highlights the problem.

In Luxembourg, where it is headquartered, it posted losses of $1 billion, allowing it to claim a tax credit.

Several countries have pushed forward with their own digital tax, frustrated by delays in introducing a global system.

The UK is imposing a 2% levy on digital businesses with revenues over $700 million, of which $35 is generated in the UK.

It sends exports worth about $890 billion to the US, making it hardest hit if no solution can be found and a 25 percent tariff is imposed.

The list of affected items includes perfumes, makeup, upright freezers, board game sets such as chess or backgammon boards, and shaving brushes.

And traveling circuses, menageries, merry-go-rounds, boat swings, shooting galleries and other amusement rides are all eligible for rates.

India's affected exports include basmati rice, pearls, precious stones and gold chains

India’s affected exports include basmati rice, pearls, precious stones and gold chains

Stemware from Austria is on the tariff list, as are binoculars, telescopes and microscopes

Stemware from Austria is on the tariff list, as are binoculars, telescopes and microscopes

From Spain, frozen octopus and octopus products qualify for tariffs if no solution can be found to the current digital tax deadlock

From Spain, frozen octopus and octopus products qualify for tariffs if no solution can be found to the current digital tax deadlock

Each country’s list covers the same terrain and offers a quirky look at a country’s exports.

So for India, it includes basmati rice, rattan furniture and gold chains, as well as cigarette paper.

For Italy, it’s jackets and blazers, shoes and handbags.

And for Spain, the list includes octopus – frozen or in other products.

It reflects the Trump administration’s threat to impose crippling tariffs on French champagne and cheese when France said it imposed a three percent digital tax on tech giants. They were also suspended.

The countries targeted by the latest round have imposed a similar level of tax on digital companies above a certain size.

The US says the mechanism is unfairly targeting Silicon Valley.

The Biden administration is instead pushing for a global tax deal to give advanced economies the power to collect corporate taxes from large multinationals in exchange for a minimum tax rate.

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