Trump Issues Memo on Tariffs for EU, Other Countries That 'Discriminate' Against US Companies
The U.S. will consider a revival of Section 301 investigations on digital services taxes in several countries, as well as potential tariffs to counter “trade and regulatory practices” in those and other countries that “discriminate against” or “disproportionally affect” U.S. companies, under a memo signed by President Donald Trump Feb. 21.
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The memo says that it is the policy of the Trump administration “that where a foreign government, through its tax or regulatory structure, imposes a fine, penalty, tax, or other burden that is discriminatory, disproportionate, or designed to transfer significant funds or intellectual property from American companies to the foreign government or the foreign government's favored domestic entities, my Administration will act, imposing tariffs and taking such other responsive actions necessary to mitigate the harm to the United States and to repair any resulting imbalance.”
“This Administration will consider responsive actions like tariffs to combat the digital service taxes (DSTs), fines, practices, and policies that foreign governments levy on American companies,” said a fact sheet released alongside the memo.
“Regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act and the Digital Services Act, will face scrutiny from the Administration,” the fact sheet said.
Under the memo, the Office of the U.S. Trade Representative will consider whether to “renew” Section 301 investigations on DSTs in France, Austria, Italy, Spain, Turkey and the U.K., and also will consider starting an investigation on Canada, which more recently imposed a DST.
Reports on regulatory practices that discriminate against U.S. companies will be due alongside other trade reports that an earlier executive order required by April 1 (see 2501200002).
The memo also directs U.S. agencies to consider policies of the EU and U.K. that have “the effect of requiring or incentivizing the use or development of United States companies' products or services in ways that undermine freedom of speech and political engagement or otherwise moderate content,” with the results of that study also due April 1.
It says that the USTR will establish a process that allows U.S. businesses to report foreign tax or regulatory practices that harm U.S. companies.