US President Donald Trump has stoked international tensions by threatening to double tax rates on foreigners and offshore companies operating in the US.
Using Section 891 of the US Internal Revenue Code, a 1930s law that allows for tax retaliation, Trump is targeting countries like France and Canada that impose digital services taxes on American technology companies.
The order marks a sharp shift from multilateral cooperation to a more aggressive unilateral approach, targeting countries like Ireland and the European Union, where US companies keep their profits and intellectual property.
Experts have warned that the move could worsen already tense global trade relations.
According to Allie Renison, a global trade consultant, the strategy goes beyond tariffs and marks the beginning of a broader new economic war.
With 60 days to devise countermeasures, the world’s largest economy is now bracing for an inevitable wave of international tax conflicts.
