Will NZ get into a trade war with the US?

Stuff reports:

President Trump’s threat to retaliate against France’s “digital services tax” demonstrates the big risk that New Zealand would be taking if it decided to press ahead with a near identical tax on technology multinationals, tax experts are warning. …

Trump responded in a tweet on Saturday that the US government would impose “substantial retaliatory action”, hinting that could include tariffs on French wine.

The New Zealand government has been consulting on imposing a similar 3 per cent tax on the New Zealand revenues of technology giants such as Google, Facebook, Airbnb and Uber.
That tax would be in addition to the taxes that the New Zealand subsidiaries of those technology multinationals already pay on their local profits.

A tax on revenue instead of profits is simply wrong. And as we have seen with France would encourage the US to respond with special tariffs against NZ companies. We would lose massively.

The proposal has hit a wall of opposition from tax experts.
Government officials have previously cautioned the proposed digital services tax could breach international trade rules or tax agreements and invite retaliation, and PWC tax partner Geof Nightingale said Trump’s response showed that risk of retaliation was real.
Trump’s tweet was evidence of the “exact risk” that New Zealand tax practitioners were worried about, he said.

I doubt even this Government is so stupid that it will proceed. Time will tell though.

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