Trump's Tax Retaliation Plan Targets Global Tech Levies

The U.S. is considering a provision in a sweeping tax bill allowing President Trump to retaliate against countries imposing digital service taxes on American tech firms like Amazon and Google. This move aims to counter foreign levies but raises concerns about potential declines in foreign investment.

U.S. President Donald Trump may gain authority to retaliate against nations imposing digital service taxes on major American tech companies, under a provision within a substantial tax bill under consideration by Congress. Kansas Republican Representative Ron Estes supports the provision, highlighting reciprocity in tax policies.

Several European countries and others globally enforce or plan such taxes on U.S. tech services, similar to Germany's potential 10% levy on platforms like Google. This has triggered bipartisan discontent in Washington, where Democrats, although generally opposing the overarching tax bill, have not criticized this retaliatory measure.

Designed to reduce global trade barriers, the bill could enable tax hikes on foreign entities operating in the U.S., potentially raising $116 billion over a decade. However, it faces criticism for possibly deterring foreign investment in America due to increasing tax burdens by listing countries with 'unfair' taxes, escalating rates annually up to 20 points.

(With inputs from agencies.)