Yahoo Finance DAVOS 2021: EU ministers hopeful of deals on tech tax and cutting tariffs under Biden
Leading European ministers are hopeful the new Biden administration will agree to dial down a tariff dispute with the EU and back a global tech tax.
Germany economic affairs minister Peter Altmaier and French finance minister Bruno Le Maire struck an optimistic tone at a panel event at the virtual Davos Agenda 2021 summit on Monday.
Altmaier was asked how Europe could persuade the US to “roll back” tariffs.
“I do not believe we will have to persuade the new administration,” he replied.
“My personal belief is that many of the people I know personally from the past are already persuaded that we have to rely more on open markets; that we have to rely again on multilateralism.”
New 25% levies on certain French wines and a 15% tax on German aircraft parts were among the US tariffs which came into force earlier this month.
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They are part of a 16-year US-EU dispute over aircraft subsidies, which escalated after the World Trade Organization (WTO) ruled both sides could retaliate with tariffs under global trade rules.
Reuters reports talks stalled in the final weeks of US president Donald Trump’s administration.
Meanwhile Le Maire said it was “very good news” that Treasury secretary Janet Yellen was open to proposals for new minimum global tax rates and levies on tech giants.
He used the panel discussion on post-pandemic recovery to dub large tech firms “the winners of the economic crisis,” adding: “How can you explain to some sectors that have been hit severely by the crisis and are paying their due level of taxes that the digital giants will not have to pay the same amount of taxes?
“That is unfair, also inefficient from a financial point of view.”
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He said governments were “on the right track” to finding a new agreement on an international tax system this spring.
Talks under the umbrella of the Organization for Economic Cooperation and Development (OECD) hit a block after Trump’s administration withdrew. France and the UK are among the countries to have introduced their own taxes in the absence of global agreement, sparking a backlash from the US government.
New US tariffs on French cosmetics were also due to be introduced earlier this month in retaliation to the French tax, which is alleged to unfairly target US companies. The US trade representative’s office announced on 8 January they had been suspended, however, as officials were still investigating similar taxes by other countries, according to AP.
Yellen set out some of her own views in written responses to questions by the US Senate finance committee last week. She said the Biden administration was “committed to the cooperative multilateral effort to address base erosion and profit shifting” through the OECD and G20, and to “resolve the digital taxation disputes in that context.”
She also said agreeing a global minimum corporate tax rate would prevent a “destructive global race to the bottom.”
WEF’s annual meeting of global business, political and civil society leaders has been postponed to May and moved from Davos, Switzerland, to Singapore because of the pandemic.
The move led to the launch of this week’s additional ‘Agenda’ event in the run-up to the in-person summit, with more than 100 virtual sessions including heads of state and CEOs of global companies.
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