The Office of the United States Trade Representative (USTR) announced that it is accepting comments on whether to impose 25 percent tariffs on roughly $880 billion of goods imported from Austria, India, Italy, Spain, Turkey, and the United Kingdom in retaliation for digital services taxes (DST) imposed by those countries. The potential tariffs would be applied under Section 301 of the Trade Act of 1974.
Potential tariffs are aimed at products across various industries and include among others, leather articles, textile products, ceramic articles, stemware, glassware, glass fibers, copper alloys, printed circuit assemblies, and various instruments from Austria; seafood, rice, bamboo articles, corks, cigarette paper, wool yarn, bras, pearls, precious stones, precious metal articles, and furniture from India; seafood, perfumery, travel and leather goods, apparel, footwear, spectacle lenses, and optical elements from Italy; seafood, handbags, belts, footwear, hats, and glassware from Spain; textile floor coverings, bed linen, curtains, stone and ceramic articles, precious metal articles, and imitation jewelry from Turkey; and personal care and cosmetic products, apparel, footwear, ceramic articles, precious metal articles, imitation jewelry, refrigeration equipment, industrial robots, furniture, and games from the UK.
Complete country-specific lists of potentially affected products are included in the following notices: Austria/Deadline/Products, India/Deadline/Products, Italy/Deadline/Products, Spain/Deadline/Products, Turkey/Deadline/Products, and United Kingdom/Deadline/Products.
In January, USTR determined that each of the six countries’ digital services tax (DST) is unreasonable or discriminatory and burdens or restricts U.S. commerce, i.e., meets the legal standard under Section 301. USTR found these countries’ DST to be actionable for the following reasons:
Austria – only applies to companies with at least €750 million in global revenue and €25 million in Austria-specific revenue derived from digital advertising revenue; India – only applies to “non-resident” companies; Italy – only applies to companies with at least €750 million in global revenue and €5.5 million in Italy-specific revenue derived from the provision of digital services; Spain – only applies to companies with at least €750 million in global revenue and €3.0 million in Spain-specific revenue derived from the provision of digital services; Turkey – only applies to companies with at least €750 million in global revenue and TRY 20 million in Turkey-specific revenue derived from the provision of digital services; and the United Kingdom – only applies to companies with at least £500 million in global revenue and £25 million in U.K.-specific revenue derived from the provision of digital services.
The USTR’s latest action also terminates its prior investigations of Brazil, Czechia, Indonesia, and the European Union because USTR has determined that these jurisdictions have not adopted or implemented DST’s.
For copies of USTR’s determinations, which detail each country’s DST, please see the notices attached at the following: Austria, India, Italy, Spain, Turkey, and the United Kingdom.
The deadlines for the submission of comments and requests to appear at the virtual hearings, as well as the list of U.S. imports on which the 25 tariffs would be imposed, vary by country. The multi-jurisdictional deadlines are as follows:
April 21, 2021: Request to appear at the hearing and summary of written testimony
April 30, 2021: Written comments
May 3, 2021: Multi-jurisdictional virtual hearing on proposed actions
May 10, 2021: Multi-jurisdictional written rebuttal comments.
The country-specific deadlines are set forth at the first set of hyperlinks.