For the past quarter century, the meteoric rise of the digital economy has been exempt from the kind of tariffs that apply to trade in physical goods.For the past quarter century, the meteoric rise of the digital economy has been exempt from the sorts of tariff that apply to trade in physical goods.
“Absent decisive action in the coming days, trade diplomats may inadvertently ‘break the internet’ as we know it today,” International Chamber of Commerce secretary-general John Denton wrote in an opinion piece published last week. While nations could draw somewhere between $280m and $8.2bn in annual customs revenue, new digital tariffs would also harm global growth by reducing economic output and productivity, according to the Paris-based Organization for Economic Co-operation and Development.
To be sure, it’s not immediately clear how exactly a government would impose customs duties on electronic transmissions. Furthermore, the WTO does not define the scope of e-commerce transmissions so there is no clarity as to which online services would be subject to new duties — be it bitcoin cryptocurrency transactions, Airbnb lodging, Uber car rides, Doordash food delivery or Peloton fitness classes.
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