On June 2, 2021, the office of the U.S. Trade Representative (USTR) announced the conclusion of its Section 301 investigations of Digital Service Taxes (DSTs) that have been adopted by Austria, India, Italy, Spain, Turkey and the United Kingdom. For each country, USTR determined that it would take action in the form of additional duties of 25% on certain designated products from each country. However, such additional duties have been immediately suspended for a period of up to 180 days – until November 29, 2021 – to provide additional time to complete ongoing multilateral negotiations on international taxation issues. In making the announcement, USTR Katherine Tai stated, “The United States is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with digital services taxes … The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future.”

In January 2021, USTR found that the DSTs adopted by these countries “discriminate[] against U.S. companies, [are] inconsistent with prevailing principles of international taxation, and burden or restrict[] U.S. commerce.” See SmarTrade Updates of January 7, 2021 and January 14, 2021. In March 2021, the office of the USTR announced that it was considering tariffs of up to 25% “on an aggregate level of trade that would collect duties on goods” from each country, sought public comments and held a public hearing on potential retaliatory measures. See SmarTrade Update of March 29, 2021.

Today’s actions formally conclude the investigation and notify the public that the USTR has determined the appropriate action to be the imposition of ad valorem import duties of 25% on products of the six countries. The USTR has prepared six notices that indicate in Appendix A to each notice the specific products/tariff subheadings upon which these duties will be placed:

  • Austria – Annex A contains a list of 23 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $65 million.
  • India – Annex A contains a list of 26 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $119 million.
  • Italy – Annex A contains a list of 44 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $386 million.
  • Spain – Annex A contains a list of 27 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $324 million.
  • Turkey – Annex A contains a list of 32 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $310 million.
  • United Kingdom – Annex A contains a list of 67 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $887 million.

As noted, however, collection of these additional duties has been suspended for 180 days.