McCarter & English partner Zack Hadzismajlovic spoke with Tax Notes about President Trump’s push to implement 100 percent media tariffs and whether there is any legal basis to do so. Zack said that the administration lacks authority to impose tariffs on foreign films and that other issues would likely arise. “Since 1988, the Berman Amendment limits the executive’s power under the International Emergency Economic Powers Act (IEEPA) from impeding the free flow of information and ideas,” he said.
Zack also discussed the United States’ ongoing negotiations for a side-by-side system that would exempt US-partnered multinational enterprise groups from certain global minimum tax rules, similar to the digital services tax (DST) that many other countries have adopted as a temporary measure to recapture missed tax revenue. He noted that introducing a new tax or restrictive trade measure that resembles a DST could complicate the sensitive nature of the current negotiations. “One does not tariff a service unless, of course, this is a digital services tax,” he said. “The height of hypocrisy would be to levy a DST having gone to war with the EU to have them pull back their own DSTs.”