GOP Call for Section 301 Action on Canada DST

Every Republican on the House Ways and Means Committee joined together yesterday to demand action from the Administration on Canada’s decision to impose a discriminatory digital services tax on US businesses,

In a letter to US Trade Representative Katherine Tai, the Republicans urged the Administration to launch a Section 301 investigation as a response to Canada’s action.  

“Given Canada’s decision to enact its DST on June 19, despite significant U.S. concerns expressed by Congress, USTR, and the Treasury Department, the time has come to make clear to Canada’s political leadership that the United States is done examining options and will act decisively to protect American workers, small businesses, and innovators,” the lawmakers wrote.

“We support continued engagement with the Government of Canada regarding DST implementation. To date, however, talks have been ineffective and Canada has not changed course at all. We strongly urge you to make clear that unilateral and discriminatory DSTs are unacceptable and immediately initiate an investigation under Section 301. A weak response from the Biden Administration will harm American interests, lead to a proliferation of similar measures, and allow Chinese companies to gain a foothold in the markets of our closest trading partners.”

Unless the United States responds swiftly, it will not be ready to immediately retaliate when Canada’s discriminatory DST is applied. “This is especially concerning because of the potential retroactive application of the DST,” they wrote. “At the same time that you proceed with a prompt Section 301 investigation, we also expect you to fully exercise U.S. recourse under the United States-Mexico-Canada Agreement,” the Republicans continued.

“It is disappointing that Canada seeks to erode the durability of our bilateral economic relationship. The size and scope of the relationship are something for both countries to be proud of. Yet Ottawa insists on moving forward with a policy of unique discrimination and unreasonableness, while rejecting multilateral efforts to eliminate DSTs.”