US President Donald Trump confirmed on Friday that he plans to consider digital service taxes akin to tariffs, amid a week of trade threats from the Oval Office. The move comes after evidence emerged that Americans are growing wary of new duties that could be reflected in their prices.
Trump was joined by his new Commerce Secretary Howard Lutnick, who will lead the administration’s trade efforts. Trump also promised to impose reciprocal tariffs “soon” and open up another wrinkle in his effort for reciprocal tariffs with a plan that could lead to tariffs being levied in retaliation for foreign taxes on US tech companies.
The move has sparked concerns among American consumers, with many expressing skepticism about the impact of new duties on their prices. The latest University of Michigan consumer sentiment survey showed higher inflation expectations from Trump’s possible duties.
Trump also confirmed plans to merge the United States Postal Service into his Commerce Department, citing “a lot of money” in potential savings. However, the move has sparked opposition from the organization’s board of governors, who are reportedly considering a plan to sue to stop the action.
The confirmation comes after a week of Trump’s trade threats, including promises of 25% tariffs on automobiles, semiconductors, imported drugs, and lumber. The deadline for these tariffs is set to be April 2, with Trump promising that levying 25% tariffs on steel and aluminum will take effect on March 12.
The administration has touted the potential revenues from tariffs, including the 10% duties on China already imposed. Kevin Hassett, director of the National Economic Council, estimated that new restrictions on China could bring in $500 billion to $1 trillion over the coming decade.
Trump also announced an executive order to study whether tariffs could be levied in retaliation for foreign taxes on US tech companies, a move that has been praised by some as a way to balance the budget of the United States. However, the European Union and other nations have long criticized digital service taxes as unfair and burdensome.
Source: https://finance.yahoo.com/news/the-tariffing-is-going-to-be-interesting-donald-trump-caps-off-a-week-of-tariff-threats-222012416.html