US threatens UK with new tariffs on exports over tech tax proposal ‘They will retaliate’

UK warned to 'not upset US' following tax row

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UK plans to raise much-needed revenue post-pandemic with a tax of digital sales has sparked a furious backlash for the US Government. American companies such as Amazon and Facebook fear being hit hard by the new levy leader the Joe Biden Administration to threaten to raise tariffs on British goods crossing the Atlantic. Top economist Keith Pilbeam has warned the UK Government “not to upset the US.”

Professor Keith Pilbeam told RT: “A digital services tax sounds like a good idea except when you try to actually implement it as we are seeing.

“The Americans say it is targeted at them you know they have very successful digital service companies and therefore they are going to retaliate.

“So it is maybe not such a good idea, I mean there are other ways of raising taxes which is called corporation tax of course.”

Asked who comes out worse in a tariff war, Prof Pilbeam replied: “Well, no one will ever win when there is tariffs alright.”

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He added: “The only ones that win are the industries that are maybe protected but everybody else loses because consumers end up paying higher prices.

“The governments don’t necessarily get much revenue as they think as well you know because firms don’t forget these companies do pay taxes because they employ a lot of people in the UK.

“For example, Google is putting their head office here for Europe and that is going to raise a lot of money for the Government.

“They pay national insurance and their employees pay tax so you have got to be very careful not to upset them really”

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Tensions also rose this week after the Biden White House published a list of British goods that could be hit by a 25 percent tariff in retaliation for the UK imposing digital services tax (DST) on technology firms.

Goods include games consoles, furniture, make-up and overcoats.

A UK Government spokesperson warned if the US proceeded to “implement these measures” then they “would consider all options to defend UK interests and industry.”

Figures from the House of Commons library revealed the UK exported £141billion of goods and services to the US in 2019, 21 percent of all exports.

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It comes as the Express learns that a “fast and efficient” US trade deal is off the cards after Washington ruled out using a special exemption to speed up trade legislation through Congress.

This special power, which expires on July 1, is known as the Trade Promotion Authority (TPA) and was established by the Trump administration to accelerate the passing of trade deals through Congress.

Sources close to International Trade Secretary Liz Truss on Monday night said the TPA and Tariff threat creates “an unnecessary and disappointing barrier.”

But one Whitehall source said a deal could “certainly be achieved” adding: “There is a positive tone on both sides but it could take years until the end of the current presidential term.”

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