Mnuchin threat­ens US auto tar­iffs to counter dig­i­tal tax

Muscat Daily - - BUSINESS -

Washington, US - US Trea­sury Sec­re­tary Steven Mnuchin dan­gled the prospect of re­tal­ia­tory tar­iffs on au­to­mo­bile im­ports if coun­tries go ahead with dig­i­tal tax­a­tion plans.

“If peo­ple want to just ar­bi­trar­ily put taxes on our dig­i­tal companies, we will con­sider ar­bi­trar­ily putting taxes on car companies,” Mnuchin said at a panel dis­cus­sion at the World Eco­nomic Fo­rum on Wed­nes­day. “We think the dig­i­tal tax is dis­crim­i­na­tory in na­ture.”

In­ter­net companies have long been the tar­get of com­plaints that they don’t pay enough tax. France im­posed a 3 per cent levy on the dig­i­tal rev­enue of companies that make their sales pri­mar­ily in cy­berspace, such as Face­book Inc and Al­pha­bet Inc’s Google.

Other coun­tries also are tak­ing ac­tion. The UK gov­ern­ment plans to go ahead with a tax on dig­i­tal ser­vices in April, ac­cord­ing to Chan­cel­lor of the Ex­che­quer Sa­jid Javid.

Speak­ing dur­ing the same panel dis­cus­sion in Davos, Switzer­land, Javid said the levy is de­signed to be tem­po­rary and to fall away once there’s in­ter­na­tional agree­ment on the is­sue.

Bri­tain and the US will have pri­vate talks on the mat­ter, just as Pres­i­dent Don­ald Trump had with French Pres­i­dent Em­manuel Macron, said Mnuchin, who will meet Javid in Lon­don on Satur­day.

The Trea­sury Sec­re­tary and his UK coun­ter­part both termed a trade deal be­tween the two coun­tries a pri­or­ity. Bri­tain is due to leave the Euro­pean Union at the end of this month, though Javid said a deal with the EU will take prece­dent.

“Hav­ing a free trade agree­ment be­tween the sixth largest econ­omy in the world and the largest econ­omy in the world is go­ing to ben­e­fit all our con­sumers in terms of jobs, prices,” Javid said. “It’s hugely im­por­tant.”

In a move that might fa­cil­i­tate the im­ple­men­ta­tion of reprisals for a dig­i­tal tax, the US De­part­ment of Jus­tice re­cently said the White House can use ex­ec­u­tive priv­i­lege to de­cline to re­lease a Com­merce De­part­ment re­port ad­vis­ing Trump on pro­posed tar­iffs on im­ports of au­to­mo­biles and car parts.

The study fo­cused on whether to im­pose tar­iffs on the auto im­ports un­der Sec­tion 232 of the Trade Ex­pan­sion Act, which al­lows for du­ties with­out a vote by Congress if im­ports are deemed a na­tional-se­cu­rity threat. It was the same law the Trump ad­min­is­tra­tion used to slap tar­iffs on steel and alu­minium im­ports.

“There’s no ques­tion the pres­i­dent’s tar­iffs have been a big in­cen­tive in all these trade agree­ments,” Mnuchin said. “Whether you like tar­iffs or don’t, we wouldn’t have these trade agree­ments with­out ac­tual tar­iffs or the threat of tar­iffs.”

Steven Mnuchin

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