Trump Orders an Investigation on the Impact of Digital Services Taxes

The memorandum directs the following:

• The U.S. Trade Representative (USTR) shall determine whether to renew the Section 301 of the Trade Act of 1974 investigation of DSTS of Austria, France, Italy, Spain, Turkey, and the United Kingdom.
• The USTR shall determine under Section 302(b) of the Trade Act of 1974 whether to investigate the DST of any other country, including Canada, that may discriminate against U.S. companies or burden or restrict U.S. commerce.
• The USTR shall determine whether to pursue a panel under the U.S.-Mexico-Canada (USMCA) Agreement on the DST imposed by Canada.
• Treasury, Commerce, and the USTR shall identify trade and other regulatory practices by other countries that discriminate against U.S. companies in the digital economy.
• Treasury, Commerce, and the USTR shall investigate whether the EU or the UK requires the use or development of U.S. companies’ products or services in a way that undermine freedom of speech and political engagement or otherwise moderate content.
• Treasury, Commerce, and the USTR shall determine whether any foreign country subjects U.S. citizens or companies to discriminatory or extraterritorial taxes in the digital economy that undermine the global competitiveness of U.S. companies.
• The USTR shall identify tools the U.S. can use to secure a permanent moratorium on customs duties on electronic transmissions.
• The USTR, Commerce, and the Senior Counselor to the President for Trade and Manufacturing shall establish a process that allows American business to report to the USTR foreign tax or regulatory practices that disproportionately harm U.S. companies.

The memorandum does not provide a deadline for the actions. Schenker will continue to monitor the status of these reports and potential actions.