NEW YORK – Joe Biden prepares his first trip as president to Europe with a relaxed gesture towards the allies, on the commercial front: he hits them with a punitive duty for the digital tax, but suspends this tax for six months with the forecast that an agreement will be found between the two sides of the Atlantic. The new duty of 25% on certain product categories applies to six countries including Italy, and would penalize 300 million annual imports of Made in Italy on the American market. But it may never go into effect if White House expectations for a deal are confirmed.
Leading the game is the new foreign trade representative, Katherine Tai. The country most affected by tariffs would be the United Kingdom. According to Tai, these duties would still have a solid legal basis to offset the damage to the American economy from digital taxes levied in those countries. However, he stresses that priority must be given to the search for a “multilateral solution to a set of problems concerning international taxation”.
On the occasion of Biden’s trip to Europe, the first stop is the G7 in Cornwall under the presidency of Boris Johnson, which could be preceded by an agreement at the level of economic ministers on the global minimum tax: a dossier that is dear to Biden because it is preparatory to raise the levy on all US companies. The digital tax mainly affects American companies, given that Big Tech giants such as Amazon, Alphabet-Google and Facebook are concentrated on the West Coast.
The digital exports of America’s 40 largest tech companies are worth $ 517 billion annually. Another decisive appointment could be the G20 of economic ministers in Venice on 9 and 10 July: an agreement could be reached there that includes global minimum tax and digital tax. We would then go to a “disarmament” of duties, allowed by a harmonization of levies on multinationals.
This is the scenario on which Biden is betting and on which his Treasury Secretary Janet Yellen, in the G7 of economic ministers, will work from tomorrow. Among the countries on which the duties were announced and then suspended, in addition to Italy, Spain, Austria and the United Kingdom, India and Turkey are also included. France, a pioneer in digital tax, had already been hit at an earlier stage.