US raises prospect of trade war with UK over planned tax on US tech giants

Mail Online | 1/22/2020 | Jack Maidment, Deputy Political Editor For Mailonline
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Washington today raised the prospect of starting a trade war with the UK if the British government goes ahead with plans to impose a tax on US tech giants.

US Treasury Secretary Steven Mnuchin said Donald Trump will personally heap pressure on Boris Johnson to drop the proposed levy as Sajid Javid insisted it will go ahead.

Mr - Javid - Services - Tax - April

Mr Javid said the digital services tax will be introduced from April but will only be a temporary measure until an international agreement is in place on how to deal with big online companies like Google and Facebook.

But Mr Mnuchin was clear the White House remains ardently against the move as he hinted retaliatory tariffs could be imposed on the UK's car industry if the tax is rolled out.

US - France - Truce - President - Emmanuel

The US and France have announced a truce over President Emmanuel Macron's plans to introduce a similar measure after Washington responded with a threat to slap punitive tariffs on products including French cheese and wine.

Mr Javid said the tax - a two per cent levy on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users - will be introduced.

World - Economic - Forum - Davos - Switzerland

Speaking at the World Economic Forum in Davos, Switzerland, the Chancellor said: 'We plan to go ahead with our digital services tax in April.

'It's important - as we said at the time when we first introduced it to Parliament and legislated for it - it is a proportionate tax.

'It - Tax - Tax - Solution

'It is a tax that is deliberately designed as a temporary tax, it will fall away once there is an international solution.'

The UK has been urged to hold back on pressing ahead with the levy by the Organisation for Economic Co-operation and Development (OECD), which called for time to allow the push for an international approach to succeed.

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