Illustration: Brendan Lynch/Axios
President Trump on Friday signed a memo to begin the process of retaliating against countries perceived as targeting the tech industry, including through digital services taxes.
Why it matters: Big Tech and lawmakers from both sides of the aisle are eager for Trump to hit back at France, Canada and others after what they felt was an inadequate response from the Biden administration.
Driving the news: The memo instructs the Office of the U.S. Trade Representative to determine whether to renew Section 301 investigations into the digital services taxes of France, Austria, Italy, Spain, Turkey, and the United Kingdom from Trump's first term.
- It also instructs USTR to look into new countries and whether a panel under the United States-Mexico-Canada Agreement should be pursued to investigate Canada's DSTs.
- The memo does not set a timeline for when tariffs could be imposed.
The memo is broad and goes beyond DSTs in determining whether to retaliate against a foreign government, stating the administration will consider:
- Discriminatory taxes
- Regulations "that could inhibit the growth" of U.S. companies
- Any act that could jeopardize intellectual property
- Any act that serves to undermine the competitiveness of U.S. companies
Context: Trump's pick to lead USTR, Jamieson Greer, told senators earlier this month that the agency needs to explore Section 301 to combat DSTs.
- That's an approach then-USTR Robert Lighthizer took in the first Trump administration that resulted in threats to impose billions of dollars worth of tariffs, but never came to fruition.
- Dozens of countries have imposed or are considering imposing digital services taxes. Canada's took effect last year.
What we're watching: French President Emmanuel Macron plans to visit D.C. next week.
- France's Finance Minister Eric Lombard told Bloomberg last week the country would keep the taxes in place despite threats of retaliation.
