WASHINGTON, DC – Today, U.S. Trade Representative (USTR) Ambassador Katherine Tai announced the conclusion of the year-long investigation of digital services taxes imposed on U.S. companies overseas in six countries. As part of the investigation, USTR proposed retaliatory duties on a number of products imported from those six countries, including brown basmati rice from India. The announcement moved to immediately suspend imposition of retaliatory tariffs for up to 180 days to continue tax negotiations with those trading partners.
As part of the USTR’s investigation process, the Biden Administration solicited feedback from the impacted private sector regarding the proposed retaliatory tariffs in April and May. USA Rice submitted comments in April (see USA Rice Daily, April 30, 2021
) that supported the USTR-proposed 25 percent duty on all brown basmati imported from India, in addition to requesting duties be applied to all imported rice from India.
“Today’s announcement from USTR is not surprising, as the suspension or the delay of the retaliatory tariffs being applied shows that the U.S. wants to negotiate in good faith over the coming months but the looming financial threat provides leverage to bring those partners to the table,” Peter Bachmann, USA Rice’s vice president of international trade policy. “We understand that rice was not the intended target for these digital service tax investigations, but retaliation provides the opportunity for the U.S. to start leveling the playing field against India’s blatant over-subsidization of their domestic rice production and exports. In the event negotiations are not concluded, we hope USTR implements the proposed retaliation against Indian rice imports.”
In a press statement, Ambassador Tai said: “Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future.”