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USTR suspends additional tariffs in Sec 301 investigation of French DST

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Overview

The US Trade Representative (USTR) on January 7 announced that it has suspended the additional tariffs on certain products of France (mainly cosmetics, skincare, and handbags) that had been announced in July 2020 and were scheduled to go into effect on January 6 as part of the Section 301 investigation of France’s Digital Services Tax (DST). The USTR said it has decided to suspend the tariffs in light of the ongoing investigations of similar DSTs adopted or under consideration in 10 other jurisdictions: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom.

The takeaway

The USTR’s suspension of the tariffs appears to reflect an intent to allow for developing a coordinated response to the actions of various countries whose DST frameworks are being investigated for or have been determined to constitute discrimination against American companies, rather than a reversal in the intent to impose retaliatory tariffs. Therefore, companies should not interpret this suspension as signaling a broader policy shift.

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Anthony Tennariello

Customs and International Trade Co-leader, PwC US

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