It seems the president of the United States, Donald Trump, is trying to become some kind of a defense shield for big tech giants in the country. A memorandum issued last Friday by Trump indicates imposing extra tariffs on countries that aim to tax big U.S. tech giants.
Trump warns foreign nations of imposing tariffs if they tax U.S. tech giants
One of the primary targets of the Trump-signed memorandum is the Digital Services Taxes (DSTs). This taxation scheme prevents tech giants from making profits in one country and collecting them in different countries.
Today, The Register reported on Trump’s planned tariffs and added that tech companies like Netflix are the reason why DSTs are in place. As you may know, the payment you make for Netflix subscriptions goes to an entity in the Netherlands. So, they are taxed there instead of in the US. Many of you may not think about it, but that’s a favorable scenario for the streaming giant.
In the past, governments have argued that it is an unfair practice because Netflix is selling its services to users in different regions/countries. Therefore, it should face the same taxation rate as other businesses operating in such regions/countries. Well, Netflix and other U.S. tech giants won’t worry about taxes, thanks to Trump’s tariff.
Introduced by the Organisation for Economic Co-operation and Development (OECD), DSTs were a temporary solution to its wider plan to reduce tax avoidance loopholes. However, the truth is that the body hasn’t been up to the mark in its work. As a result, big tech giants have been avoiding paying taxes. Now, that won’t change either, as foreign governments will think twice before taxing U.S. tech giants, fearing Trump’s extra tariffs.
A part of the memorandum signed by President Trump reads, “My Administration will not allow American companies and workers and American economic and national security interests to be compromised by one-sided, anti-competitive policies and practices of foreign governments.”
The U.S. tech giants have been in trouble in the EU
This isn’t the first time the U.S. president is making such a decision. Recently, Trump confirmed that he’ll be imposing hefty tariffs on foreign-made chips to boost the country’s economy and tech companies. The big U.S. tech giants have been in the firing line of different authorities across the globe.
One of the prime examples of this is the U.S. tech giants’ situation in the EU. In fact, Meta, which is among the affected tech giants, looked up to Trump to resolve the ongoing situation. The company’s CEO exclusively urged the president to stop the EU from fining U.S. tech companies.
