President Trump has issued two executive orders addressing the issue of discriminatory taxation, including Digital Service Taxes (DSTs) targeting U.S. technology companies. The executive orders instruct the Department of Treasury, Department of Commerce, and the Office of the U.S. Trade Representative to investigate these taxes' impact on U.S. entities and consider appropriate responses.

Previously, an official dispute with Canada was initiated by the former administration over its DSTs, questioning their compliance with obligations under the U.S.-Mexico-Canada Free Trade Agreement (USMCA). The current administration retains the option to pursue action under Section 301 of the 1974 Trade Act, a strategy previously employed against DSTs in Europe.

A study by the CCIA Research Center indicates that Canada's DST could result in direct losses of up to $2.3 billion annually for U.S. companies and potentially lead to thousands of job losses in the United States. If such measures were adopted globally, they could impose tens of billions in annual payments on U.S. firms and significantly affect the U.S. tax base.

Jonathan McHale, Vice President of Digital Trade at CCIA, stated: "Executive orders have put trading partners on notice that discriminatory taxes like Digital Services Taxes aimed at US companies will be investigated and challenged." He emphasized that these taxes contradict longstanding trade principles concerning company treatment in foreign markets.

McHale further noted: "Fighting discriminatory taxes aimed at U.S. companies is a longstanding policy enjoying bipartisan support and extending back to the first Trump administration." He warned that without strong challenges from U.S. leaders, existing barriers in countries like Canada could remain unaddressed while other nations might adopt similar measures.