US House Passes Tax Bill Allowing Trump Retaliation on Foreign Digital Taxes

A provision in a U.S. tax bill currently under Senate consideration would empower President Donald Trump to impose retaliatory taxes on countries that levy digital service taxes on major American tech companies such as Amazon, Alphabet, and Meta. This measure, found in Section 899 of the bill, would authorize the Treasury Department to designate foreign digital taxes as unfair and potentially increase tax rates on foreign individuals and companies operating in the U.S., with a projected revenue of $116 billion over the next decade. Seventeen countries, including several in Europe and Germany with its proposed 10% tax, have enacted or are considering such levies, which have drawn bipartisan criticism in Washington. Proponents argue this provision is necessary to ensure foreign businesses are taxed reciprocally and to prevent the U.S. from being characterized as a tax haven. However, experts warn that retaliatory taxes may deter foreign investment in the U.S. and could escalate trade tensions. While Democrats largely oppose the broader tax bill, many have not openly opposed this specific retaliatory tax provision, which is part of a larger package including immigration and tax policy changes.