US President Donald Trump has now given direct threat to many countries of the world regarding Digital Service Tax (DST). He said that whichever country imposes this tax on American technology companies, it may have to face 100 percent tariff on exports to America. Trump said that such taxes would destroy the existing trade agreement.

In a post on social media, Trump said that countries that impose digital services tax on American companies will face tough retaliatory tariffs. He also said that the existing deal will be canceled if necessary. Let us tell you that Digital Services Tax is a tax imposed on the earnings of those big digital companies which earn money from online advertising, digital marketplace and user data.

What is the logic of European countries?

Many European countries have implemented or currently propose such taxes. European countries argue that multinational technology companies should pay more taxes where they earn. America has been opposing these things for a long time. America says that American companies like Google, Apple, Meta, Amazon and Microsoft are being specifically targeted through the Digital Services Tax.

Digital service tax still unresolved

This latest warning from Trump has come at a time when despite agreeing on a major trade agreement earlier this year, the governments of Washington and European countries have not been able to reach a consensus regarding digital tax. Digital services tax remains one of the key unresolved issues in trans-Atlantic trade relations. The US President has said that any country that implements such a tax could face 100 percent tariffs on all goods exported to the US, regardless of any existing or future trade agreements.

Britain and France were also threatened

Trump has repeatedly threatened trade action against countries that have implemented digital services taxes. Earlier this year, he warned Britain that if it imposed a 2 percent digital tax on big American technology companies, tariffs would be imposed on them too. He also threatened France that if it did not withdraw its digital tax, 100 percent tariff would be imposed on its wines.

India US Trade Deal: America has quietly made changes in the fact sheet related to the India-US trade deal. A day after this document was released by the White House, its words and some conditions were changed. The biggest change has happened in the line in which earlier it was said that India “commits” to buy American goods worth more than $500 billion. Now it has been changed to “intends to buy”. Due to this an important part of the agreement has become soft.

What was said in the factsheet

A few days after the framework for a mutually beneficial trade deal between India and America was revealed, the White House released a fact sheet on Tuesday. It was said that India will eliminate or reduce taxes on all American industrial goods and many types of American food and agricultural products. An earlier version of the fact sheet read, “India has committed to buying more American goods and more than $500 billion worth of American energy, information and communications technology, agriculture, coal and other products.”

what changed now

In the new version on the White House website, the word “intention” has been used instead of “commit”. Also, the word “agriculture” has also been removed from the list of products. Similarly, the earlier version read that “India will eliminate or reduce taxes on all US industrial goods and a number of US food and agricultural products, including dried distillers grains, red sorghum, dried fruits, fresh and processed fruits, certain pulses, soybean oil, wines, and spirits.” The part “some pulses” has been removed in the new version.

Changed stance on digital tax also

In another major change, it previously said that “India will remove the digital services tax” and “commit to negotiating stronger rules to remove barriers to digital trade.” Now it has not been said in the new fact sheet that India will remove digital service tax. It only reads that “India is ready to negotiate strong bilateral digital trade rules.”

What has been decided in both the countries

Last week, India and America had announced the framework of an interim trade deal. Under this, both the countries will reduce import duty on many things, so that mutual trade can increase. According to this proposal, America will reduce the tax on Indian goods from 50 percent to 18 percent. In return, India will eliminate or significantly reduce taxes on all American industrial products and many types of American food and agricultural goods. These include dried distillers grains, red sorghum for animal feed, dried fruits, fresh and processed fruits, soybean oil, wine and spirits.

Purchase plan of 500 billion dollars

According to the joint statement of both the countries, India is planning to buy energy products, aircraft and aircraft parts, precious metals, technology related goods and coking coal worth about $ 500 billion from America in the next five years.

Trump’s big decision

After the deal is finalized, US President Donald Trump has also removed the 25 percent additional import duty imposed on India. This tax was imposed in August because India was buying oil from Russia. Trump said that India has taken “very big steps” in this direction and New Delhi has assured to stop oil imports from Moscow directly or indirectly.

When will the final deal be signed?

New Delhi and Washington are preparing to sign the final trade deal by mid-March this year.