The dispute over digital services taxes has increased after Washington pulled out of global negotiations last week, triggering fears of a new trade war between …
The dispute over digital services taxes has increased after Washington pulled out of global negotiations last week, triggering fears of a new trade war between the United States and Europe.
U. S. Trade Representative Robert Lighthizer said that Treasury Secretary Steven Mnuchin withdrew the United States from negotiations that seek to rewrite cross-border tax rules for digital trade.
“We were making no headway and the Secretary made the decision that rather than have them go off on their own, he would just say we’re no longer involved in the negotiations,” Lighthizer said June 17, during a hearing before the House Ways and Means Committee.
Mnuchin sent a letter dated June 12 to his peers in the UK, France, Italy, and Spain, the Financial Times reported. In the letter, he expressed concern that the talks had reached an “impasse.”
“This is a time when governments around the world should focus their attention on dealing with the economic issues resulting from COVID-19,” he wrote, urging countries not to rush difficult negotiations.
He also warned that the United States would retaliate if countries take unilateral measures on digital services taxes.
Lighthizer announced on June 2 a probe into digital services taxes that are being implemented or considered by a number of U. S. trading partners, including the European Union, the UK, Spain, and Italy.
