President Donald Trump ordered his trade chief to reopen investigations into digital service taxes imposed on U.S. tech firms, a move that could result in new tariffs on affected countries.
What Happened: Trump’s order, issued on Friday, is aimed at countering the DSTs, fines, practices, and policies that foreign governments impose on American companies.
The directive calls on the U.S. Trade Representative’s office to reopen past digital service tax investigations from Trump's first term and examine any new cases where digital taxes may unfairly target U.S. companies.
Digital service taxes, aimed at major U.S. tech firms like Google GOOG GOOGL, Meta Platforms Inc. META, Apple Inc. AAPL, and Amazon AMZN, have been a persistent trade issue for multiple U.S. administrations.
Countries including Britain, France, Italy, Spain, Turkey, India, Austria, and Canada have implemented these taxes on the local sales revenue of these and other digital service providers.
During Trump's first term, the U.S. Trade Representative's office launched Section 301 investigations into these policies, resulting in retaliatory tariffs on select imports.
Why It Matters: This move by Trump comes in the wake of his recent announcement to impose a 25% tariff on auto imports, chips, and pharmaceuticals, causing a stir in international trade. The tariffs are expected to take effect as early as April 2, following a report from his cabinet members outlining options for import duties.
Amid escalating trade tensions between the U.S. and China, Apple’s CEO Tim Cook is said to have met President Trump. According to Trump, Cook discussed investing “hundreds of billions of dollars” in the U.S. amid tariff threat.
Trump’s memo instructs his administration to assess whether any European Union or British policies encourage U.S. companies to adopt practices that restrict free speech or promote censorship. According to a White House fact sheet, special attention will be given to how U.S. firms are impacted by the EU’s Digital Markets Act and Digital Services Act.
This comes amid ongoing tension between tech giants and the EU.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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