SECTION 301 INVESTIGATIONS

SECTION 301 INVESTIGATIONS

Subject : International Relations

Context : Digital services taxes adopted by India, Italy and Turkey discriminate against U.S. companies and are inconsistent with international tax principles, the U.S. Trade Representative’s office said.

Concept :

• USTR, releasing the findings of its “Section 301” investigations into the digital taxes, said it was not taking specific actions at this time, but “will continue to evaluate all available options.”

About 301 Probe

• Section 301 of the Trade Act of 1974 provides the United States administration with the authority to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services.
• The law also provides the United States to impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices.
• The law states that when negotiations to remove the offending trade practices fail, the United States may take action to raise import duties on the foreign country’s products as a means to rebalance lost concessions.
• The list of products on which the United States raises import duties is called a “retaliation list.”
• The USTR carefully chooses the products to be included on retaliation to minimize the adverse impact on U.S. consumers, firms, and workers.