U.S. Trade Representative Katherine Tai announced, and then immediately suspended, new Section 301 tariffs on goods from multiple countries as part of its one-year investigation of digital service taxes (DSTs).
The new tariffs, which will be set at 25 percent if reinstated, are in response to taxes levied by Austria, India, Italy, Spain, Turkey, and the United Kingdom on revenue generated by “non-resident” companies offering digital services – including the sales of software-as-a-service products. The USTR investigation began in June 2020 and found the practices of the countries discriminatory in January.
The tariffs on certain goods were immediately suspended after the announcement for up to 180 days, “to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and in the G20 process,” the USTR said.
“The United States is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with digital services taxes,” Tai said. “The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. 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.”
Three of the countries mentioned – India, Spain, and Italy – have seafood items listed among the goods facing 25 percent U.S. tariffs.
India is facing tariffs on cold-water shrimp and prawns, cooked in-shell or uncooked, dried, salted or in brine, frozen; cold-water shrimp and prawns, shell-on or peeled, live, or chilled; and other shrimps and prawns, shell-on or peeled.
India is typically a top source of shrimp imports to the U.S., representing a high of 40.5 percent of all shrimp imports to the county in 2019. The country sent 599.3 million pounds (271,831 metric tons) of shrimp to the U.S. in 2020.
In April, the U.S.-based Southern Shrimp Alliance asked the USTR to consider a broader 2 percent tariff on all shrimp goods – rather than just the three of the seven HTSUS subheadings covering shrimp – a suggestion that was unsuccessful.
“The Southern Shrimp Alliance believes that the imposition of a 25 percent additional ad valorem duty on Indian imports made through just three of the seven HTSUS subheadings covering shrimp products will likely lead importers to re-classify merchandise to the shrimp subheadings not subject to additional duties,” SSA Executive Director John Williams said in a letter.
In addition to tariffs on Indian shrimp, the USTR is also proposing tariffs on shrimp from Spain:
- HTSUS subheading 0306.16.00, cold-water shrimps and prawns, cooked in shell or uncooked, dried, salted or in brine, frozen;
- HTSUS subheading 0306.17.00, other shrimps and prawns, cooked in shell or uncooked, dried, salted or in brine, frozen;
- HTSUS subheading 1605.21.05, shrimp and prawns not in airtight containers: fish meat and prepared meals;
- HTSUS subheading 1605.21.10 shrimp and prawns not in airtight containers: other than fish meat and prepared meals.
In addition to shrimp, the tariffs will also hit octopus from Spain under two HTSUS subheadings: 0307.52.00, octopus, frozen; and 1605.55.05, octopus as containing fish meat or prepared meals.
According to data from NOAA, the U.S. imported over USD 86.5 million (EUR 71.3 million) in octopus products from Spain, which includes frozen, dried/salted, and prepared/preserved products. That total shrank significantly in 2020, decreasing to just over USD 49.3 million (EUR 40.7 million).
In Italy, only one product is coming under the new tariffs under two separate HTSUS subheadings: 1604.31.00, caviar; and 1604.32.40, caviar substitute prepared from fish eggs, nesoi.
Photo courtesy of the office of the United States Trade Representative
