The United States plans to impose retaliatory tariffs on six countries, and India's tax may exceed 100 million US dollars

According to the Environmental Times, the United States is planning to impose retaliatory tariffs on six "allies" including India . Some Indian media said that if the United States decides to take action, the tax increase on India may reach 25%.

U.S. Trade Representative Katherine Tai said that this was a retaliatory tax increase against the six countries' increased digital service taxes on U.S. companies, and that the current U.S. government will maintain the threat of tax increases on Austria, Britain, Italy, Spain, Turkey and India.

The US believes that the digital service taxes levied by these countries are mainly aimed at large technology companies such as Facebook and Google or e-commerce platforms such as Amazon. Since these American software generate huge receivables in these countries every year, the collection of digital service taxes will have a very big impact on these American companies.

In fact, it was not just these few countries at the beginning. Countries or organizations such as Brazil, the Czech Republic and the European Union had tried to impose digital taxes on these American companies. However, the US Trade Office launched a tariff investigation at that time and threatened to increase tariffs on these countries or organizations, causing these countries to give up imposing digital service taxes. In the end, only six countries including the United Kingdom and Italy were left.

It is foreseeable that if these six countries insist on imposing a digital service tax, the United States will definitely use this as an excuse to increase tariffs on these countries. However, if they give up imposing a digital service tax, these countries will also face considerable losses. By then, whether it is the United States or the six countries subject to additional tariffs, the price level will probably rise, or there will be a large market gap waiting to be filled.

Especially India. Although the US tax increase on India will not cover all goods, if the US really imposes retaliatory tariffs on India, the tax may exceed US$100 million. In addition, the Modi government banned a number of Chinese applications for no reason in 2020. India's local applications cannot completely fill the market gap, resulting in India's dependence on US software has skyrocketed. Coupled with India's huge population base, India may be charged higher taxes than other countries at that time.

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