US administration is apparently paving way for another trade stand off with its trading partners including India. It has initiated an investigation into digital services taxes that have been adopted or are being considered by a number of its trading partners.
The probe will cover 10 countries, including Austria, Brazil, EU, India and Indonesia, among others.
As far as India is concerned, the US is objecting to India’s recent decision to impose a 2% digital sales tax on non-resident companies involved in online sales of goods and services to Indian customers.
Accordingly, the United States Trade Representative Robert Lighthizer has announced that his office is beginning the investigation.
“President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies,” said USTR Robert Lighthizer.
“We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.”
This provision gives the USTR broad authority to investigate and respond to a foreign country’s action which may be unfair or discriminatory, negatively affecting US commerce.