· Title: “USTR Ambassador Tai gives keynote in Geneva on the future role of the WTO”
· Creator: “United States Mission Geneva“— https://flickr.com/photos/us-mission/
· Source: “USTR Ambassador Tai gives keynote in Geneva on the future role of the WTO“—https://flickr.com/photos/us-mission/51590723127/in/photolist-2mATU8E-2mATUo9-2mATUxc-2mAZfYD-2mAYawb-2mATUQS-2mB2yiF-2mAZhQ9-2mB2z98-2mAZjJV-2mAZiDy-2mAYckg-2mB3LKU-2mATWAk-2mB3LxK-2mAYdeL-2mATToU-2mATT7g-2mAZfNJ-2mAZibz
· License: “CC BY-ND 2.0”—https://creativecommons.org/licenses/by-nd/2.0/
After several years of inaction and weak responses by the Biden Administration to Canada’s Digital Tax (DST), which harms American businesses, Biden’s USTR is now pursuing a trade dispute against Canada under the US-Mexico-Canada Agreement (USMCA) and will be opening consultations to address concerns.
This move comes after Canada decided in early July to impose a retroactive Digital Services Tax that will siphon over $5.3 billion from primarily U.S. companies, significantly draining the U.S. tax base. But it doesn’t stop there – at least seven other countries also impose billions of discriminatory DSTs on U.S. firms, further eroding American revenues.
While the DST, by design, targets large and medium-sized U.S. companies, their effects will ripple out to impact hundreds of thousands of American workers, small businesses, and innovators.
In a letter dated July 11, Republicans on the U.S. Ways and Means Committee urged the Biden Administration to take decisive and vigorous action against Canada’s discriminatory tax and specifically warned about the potential retroactive application.
The letter states that a “weak response from the Biden Administration will harm American interests, lead to a proliferation of similar measures, and allow Chinese companies to gain a foothold in the markets of our closest trading partners.”
“Without swift action, the United States will not be ready to immediately retaliate when Canada’s discriminatory DST is applied. This is especially concerning because of the potential retroactive application of the DST,”
After years of the Biden Administration’s blatant neglect of digital trade issues, it’s time to draw a hard line and defend the American economy. Other countries need to know and understand that plundering the U.S. tax base, targeting American companies, and undermining our economy will no longer be tolerated.
While filing a trade case against Canada is a start, it’s just the tip of the iceberg. There are countless other foreign taxes and discriminatory regulations, such as the European Unions Digital Markets Act and Digital Services Act, as well as significant antitrust fines aimed exclusively at the U.S. It’s time for the USTR and the Biden Administration to deploy every weapon in their arsenal, including Section 301 investigations, to combat these discriminatory foreign measures.