Trump Instructs Trade Chief to Revive Tariff Retaliation

Yesterday, Friday, February 21, President Donald Trump directed his trade chief, Christian Herter, to reopen the investigations directed toward imposing tariffs on imports.

This investigation is expected to look at nations that impose digital service taxes (DSTs) on American internet firms.

The DSTs are made to provide “market” nations more taxing authority over the earnings of tech-based multinational corporations that sell in their local markets.

It also applies to companies that gather information from local audiences and target ads to them, regardless of their physical location.

Details of Trump’s order were provided by a White House official, who stated that Trump was ordering his department to think about retaliatory measures.

These measures include tariffs “to combat the digital service taxes (DSTs), fines, practices, and policies that the foreign governments impose on American companies.”

The memo instructs the office of the U.S. Trade Representative to reopen investigations into digital service taxes that were started during Trump’s first term.

It also asks that any other nations that use digital taxes “to discriminate against U.S. companies” should be looked into, per a White House fact sheet.

Before signing the directive, Trump told reporters that what is being done to them in other countries with digital levies is terrible.

Additionally, Trump’s order instructs his agency to examine if any British or European Union policies “incentivize U.S. companies to develop or use products and technology in ways that undermine free speech or foster censorship.”

It will specifically examine how U.S. companies are treated under the EU’s Digital Markets Act and Digital Services Act, according to the White House fact sheet.

A Change in Leadership

The digital tax investigations were implemented by Donald Trump during his first administration in 2019.

During former President Joe Biden’s administration, his trade chief, Katherine Tai, announced 25% tariffs on more than $2 billion worth of imports from six countries in 2021.

However, she paused the efforts, allowing negotiations on a global tax agreement, which resulted in a 15% global corporate minimum tax that the U.S. Congress never approved.

On his first day back in office, Trump withdrew the United States from the global tax agreement, which has over 100 nations in it.

He claimed that the global minimum tax of 15% had “no force or effect in the United States” and asked the U.S. Treasury to develop possibilities for “protective measures.”

He did not reveal the value of the selected goods or the high tariff rate he would impose on the retaliatory taxes.