US Threatens Tariffs on UK Exports Due to Digital Services Tax | International exchange

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The Biden administration has warned it could impose a 25% tariff on UK exports to the United States after the UK imposed a digital services tax on big tech companies.

The price of exports of clothing and footwear, ceramics, beauty products and furniture to the United States could rise by a quarter, according to a list released by American officials.

The rights are designed to raise $ 325 million, which equates to estimates of what Britain can expect to collect by taxing UK sales from Amazon, Google, Facebook, eBay and other tech companies, most of them based in the United States.

US President Joe Biden has overturned objections to a global cross-border digital sales tax adopted by his predecessor and ended a Scotch whiskey surtax imposed by Donald Trump following a dispute over subsidies to the aircraft manufacturer Airbus.

But retaliation was expected against France and Britain after passing taxes on digital services before a broader deal was in place.

A spokesperson for the UK Department of Commerce said the country wanted to ensure “tech companies pay their fair share of tax” and said the new digital services tax was “reasonable, proportionate and non-discriminatory. . It is also temporary.

They added that if the United States moved forward, the United Kingdom would “consider all options to defend British interests and industry”.

UK and US trade officials held talks on the digital services tax on December 4, and UK government sources pointed out that the tax was “a temporary solution to widespread concerns about the rules. international corporate tax ”.

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Introduced last April, the digital services tax levies a 2% charge on revenues from search engines, social media services and online marketplaces.

Tech companies will continue to pay corporate tax on their UK profits, but with most profits depressed by royalties and management fees charged by overseas parent companies – a mechanism known as transfer pricing name – the treasury should keep the tax in place.

At the budget level, the Office of Fiscal Responsibility has calculated that the new tax would raise £ 300million in the current fiscal year, before rising to £ 400million in 2021-2022.


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