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Biden administration threatens retaliation…

LONDON (CU)_The United States has warned that it could impose tariffs on a range of British exports in response to the recent digital services tax introduced by the UK.

According to a list published by The Office of The United States Trade Representative, goods including ceramics, furniture, make-up, overcoats and games consoles imported from the UK could be subjected to tariffs of up to 25 per cent.

Washington says that the duties are expected to raise $325m (£235.8m), which is the US believes the European nation would raise from the “unreasonable, discriminatory, and burdensome” tax policy. 

However, London claims that the move was intended to “make sure tech firms pay their fair share of tax”, and have therefore claimed that if Washington does implement these retaliatory measures, the United Kingdom would “consider all options” to defend the country’s interests and industries.

Nevertheless, over the next few weeks, the tariffs will be subjected to a consultation in the US.

Meanwhile, exporters in the UK, whose businesses will be impacted by the possible tariffs, say that with industries struggling with the impact of the pandemic, along with new trade arrangements with the EU, this additional burden “couldn’t come at a worse time”.

“At a time when we are trying to start discussions over a UK-US trade deal, it is extremely important that both governments get around the table to remove this threat as soon as possible,” Adam Mansell, head of the UK Fashion & Textile Association (UKFT), noted.

He claimed that the threat to impose tariffs on UK- made overcoats is “hugely disappointing”.

According to the Office for Budget Responsibility, this digital services tax would raise £300m in the current financial year, and about £700m in future years.

Meanwhile, a UK government spokesperson said that the tariffs are “temporary”, as London continues to work with Washington and other partners to find a global solution for the matter.

“Like many countries around the world, we want to make sure tech firms pay their fair share of tax. Our digital services tax (DST) is reasonable, proportionate and non-discriminatory,” the spokesperson said.

“It’s also temporary. We’re working positively with the US and other international partners to find a global solution to this problem and will remove the DST when that is in place.”

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