The U.S. plans to enact new retaliatory tariffs on nations that tax digital goods from American internet companies, including those that tax App Store purchases.
The Office of the United States Trade Representative (USTR) has proposed tariffs that are approximately equal to taxes that various countries are requiring of international tech companies. Bloomberg estimates that the total annual value of the duties reaches $880 million.
The USTR’s retaliatory tariffs would tax imports as much as 25% annually from a list of countries that includes the U.K, India, Spain, Italy, Turkey, and Austria.
The countries currently charge anywhere from a 2% to 5% tariff on digital-services revenue for various online activities. Details vary by country but apply to income from online areas like digital marketplaces, advertising, software-as-a-service, social media, and search engines.
Among the countries imposing digital taxes on U.S. firms, the USTR estimates that the U.K. takes in the most, at $325 million annually.
The retaliatory tariffs would apply to physical imports. They would cover an eclectic range of products, including caviar, fairground amusements, telescopes, and shrimp.
In 2020, Apple warned developers in the Apple Developer Program that it would begin recalculating for changes in global tariffs, potentially impacting developer revenue. At the time, Italy and the U.K had recently added their 3% and 2% digital services taxes on top of their existing value-added tax (VAT). Both countries are included in the USTR’s new proposal.
The Internet Association — an American lobbying group that includes Amazon, Facebook, and Google — approved of the United States’ proposed tariffs. The group released a statement applauding the USTR’s action as “an important affirmation in pushing back on these discriminatory trade barriers as the U.S. continues to work to find a viable solution at the OECD.”
Apple is not a member of the Internet Association.
The USTR has asked for public comments on its plans. Public hearings for the new tariffs begin on May 4 with the U.K. They continue through the following week, wrapping up with Austria on May 11.