The Trump administration has announced an investigation into a string of countries that are adopting digital services taxes, including the UK, Italy, Brazil, Indonesia and the EU as a bloc, which could lead to new punitive tariffs by Washington and exacerbate global trade tensions.
The move, unveiled on Tuesday by Robert Lighthizer, the US trade representative, highlighted the administration’s growing anxiety that the largest US technology companies could face higher tax bills abroad as governments seek to boost revenues in the midst of the coronavirus pandemic.
The US investigated France last year for its digital services tax plans and threatened to impose tariffs on the country’s wines, leading to a series of tense exchanges over months between the two capitals. Washington said it was now expanding the investigation to Austria, Brazil, the Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey and the UK.