US Treasury Secretary Bessent Criticizes EU Digital Services Tax, Calls for Removal of Unfair Taxation on American Technology Giants

US Treasury Secretary Scott Bessent has cited the European Union's digital services tax as a sticking point in trade negotiations with the EU. Bessent argues that the tax unfairly targets US tech giants like Amazon and Google. The EU's economy chief, Valdis Dombrovskis, has said that there is still much to discuss in the talks. Bessent has been mostly involved in negotiations with Asian countries like Japan and South Korea.

US Treasury Secretary Scott Bessent has identified the European Union's digital services tax as a significant obstacle in trade negotiations with the EU. During a briefing at the White House, Bessent argued that the tax unfairly targets US tech giants such as Amazon and Google. This stance comes as the EU's economy chief, Valdis Dombrovskis, has acknowledged that there is still much to discuss in the ongoing talks.

Bessent has primarily focused on negotiations with Asian countries like Japan and South Korea, indicating that the digital services tax issue is a critical concern for the US. The tax, imposed by some EU member states, has been a source of contention, with the US arguing that it disproportionately affects American technology companies.

The EU's regulatory approach towards US tech firms has been the subject of scrutiny, with critics arguing that it functions as a sophisticated system of digital tariffs. According to a report by the Information Technology and Innovation Foundation (ITIF), EU policies such as the General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), and the Digital Services Act (DSA) disproportionately target leading US tech companies, extracting significant revenue and creating protectionist effects.

The US Trade Representative (USTR) has investigated these digital service taxes, concluding that they are discriminatory against US companies and represent a tax grab by the EU from the US Treasury. This stance is supported by the fact that the largest fines and regulatory investigations under these EU policies have predominantly involved American firms.

While the EU maintains that these policies are aimed at promoting competition and protecting consumers, the US views them as protectionist measures designed to benefit EU domestic industries. The ongoing negotiations highlight the complexity of these issues and the need for a balanced approach that respects the interests of all parties involved.

References:
[1] https://news.bloombergtax.com/daily-tax-report/bessent-cites-digital-services-tax-as-sticking-point-in-eu-talks
[2] https://timesofindia.indiatimes.com/business/india-business/very-close-india-may-be-first-to-sign-trade-pact-says-us-treasury-secretary-scott-bessent/articleshow/120586331.cms
[3] https://itif.org/publications/2025/04/28/de-facto-eu-tariff-system/