The US White House has warned of up to 25 per cent on a host of UK exports in retaliation for a UK tax on tech firms. A list published by the Joe Biden administration includes several items like ceramics, make up, overcoats, game consoles, and furniture. The duties are designed to raise around £235.8m, an amount America believes the UK will raise from US tech firms.
A British government spokesperson was quoted in a media report as saying it wanted to “make sure tech firms pay their fair share of tax.” They added, “Should the US proceed to implement these measures, we would consider all options to defend UK interests and industry.”
Washington argues the recently introduced digital services tax has “unreasonable, discriminatory, and burdensome attributes.” The move was initiated under former president Donald Trump. The UK and US held talks about the digital services tax in December, with UK government sources stressing that the tariff list was being seen as procedural, rather than an escalation. The tariffs are now subject to a consultation in the US over the next few weeks.
Adam Mansell, head of the UK Fashion & Textile Association (UKFT) called the threat to UK-made overcoats “hugely disappointment”. He noted the US had only removed separate tariffs on other types of fashion goods, such as British cashmere last month. He said, “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.”
The Office for Budget Responsibility calculates the digital services tax would raise £300m in the current financial year, and as much as £700m in future years.
