The U.S. Trade Representative (“USTR”) is indefinitely suspending the Section 301 tariffs on certain handbags and cosmetics from France resulting from the investigation into France’s Digital Services Tax (“DST”). These additional tariffs were announced by USTR in July 2020 and were scheduled to go into effect on January 6, 2021. USTR is suspending the tariffs while completing the Section 301 investigations of similar DSTs adopted or under consideration by ten other jurisdictions (Austria, Brazil, Czech Republic, European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom). USTR will instead “promote a coordinated response in all of the ongoing DST investigations.”

On January 6, 2021, USTR announced its findings in the DST investigations related to India, Italy, and Turkey, concluding that “each of the DSTs discriminates against U.S. companies, is inconsistent with prevailing principles of international taxation, and burden or restricts U.S. commerce.” According to its press release, “USTR expects to announce the progress or completion of additional DST investigations in the near future.”

Husch Blackwell continues to monitor the Section 301 investigations of digital service taxes and will provide further updates. Should you have any questions or concerns, please contact our International Trade and Supply Chain team.