WTO Must Renew Moratorium on Customs Duties on Electronic Sales, SIA Says

The World Trade Organization must renew the moratorium on customs duties on electronic transmissions (see 2205190049) at the ministerial conference in Geneva next week, said John Neuffer, CEO of the Semiconductor Industry Association. In a June 9 SIA blog post, Neuffer said the moratorium is at “serious risk” from some WTO members who are in favor of the increased tax revenue the duties could bring.

“Failure to renew the moratorium sets up the prospect of some WTO members, who choose to go this troubling route, imposing tariffs on just about any ones and zeros that cross borders digitally, including streaming music, software, social media, and financial transactions, just to name a few,” Neuffer wrote. He said the duties would be a “major setback for the global economy as it struggles with the ongoing COVID-19 pandemic, inflation, and Russia’s invasion of Ukraine.”

He also said the duties would specifically harm the U.S. manufacturing sector, including the semiconductor industry. “Without the duty-free movement of data that has existed over the past quarter century, there is no way we could have developed the innovative prowess we have today,” Neuffer said, “allowing us in the semiconductor industry to jam more than 50 billion transistors on one small chip and sell it into the global marketplace.”

He also said the end of the moratorium could lead to a “stampede” of future tariffs on “digital flows across borders, put an unnecessary strain on an already battered global economy, and signal to the world that inflation be damned.” U.S. Trade Representative Katherine Tai said this week she is worried that the moratorium might be dropped (see 2206060068).