WASHINGTON- The United States is investigating digital services taxes being adopted or considered by Britain, Italy, Brazil and other countries, the US Trade Representative’s office said on Tuesday, a move that could lead to new punitive tariffs and heighten trade tensions.
Such taxes are seen by several countries as a way to raise revenue from the local operations of companies including Alphabet Inc’s Google and Facebook Inc.
“President (Donald) Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies,” US Trade Representative Robert Lighthizer said in a statement. “We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.”
The announcement came after the US Commerce Department said it would investigate whether imports of the metal vanadium violate national security, a sign that the Trump administration is actively pursuing new trade barriers despite the coronavirus pandemic.
Trump based his nearly two-year trade war with China on a probe into Beijing’s intellectual property and technology transfer practices under Section 301 of the US Trade Act of 1974, which authorizes action, including tariffs, to end foreign government practices that curb US commerce.
Broad negotiations through the Organisation for Economic Co-operation and Development to set a global standard for digital taxes have proven elusive, and the coronavirus pandemic has slowed them down.