WASHINGTON, Aug 30 (Reuters) - The U.S. has requested

trade dispute settlement consultations with Canada over its new

digital services tax, the Biden-Harris administration said on

Friday, adding that the "discriminatory" tax appears

inconsistent with Canada's North American trade deal

obligations.

The U.S. Trade Representative's office said in a statement

that it will work with Canada to resolve U.S. concerns over the

new tax enacted in June, through the consultations. But if an

agreement cannot be reached after 75 days, it may request a

dispute settlement panel under the U.S.-Mexico-Canada Agreement

on trade (USMCA).

The request for consultations is the first step in the

USMCA's dispute resolution process, which ultimately could lead

to the imposition of retaliatory U.S. tariffs on imports from

Canada.

USTR had previously readied retaliatory duties against seven

other countries that had imposed digital services taxes (DSTs) -

Austria, Britain, France, India, Italy, Spain and Turkey - but

these have been suspended as global negotiations continue over

the reallocation of taxing rights on large, multinational

companies. This shift was meant to replace DSTs, but those talks

have stalled over technical details.

USTR has found unilateral digital services taxes, largely

aimed at collecting revenues from U.S. technology giants such as

Alphabet's Google, Apple ( AAPL ), Amazon.com ( AMZN ) and Meta, to discriminate

against U.S. companies.

"The United States opposes unilateral digital service taxes

that discriminate against U.S. companies. USTR is taking action

today to address Canada's discriminatory policies," U.S. Trade

Representative Katherine Tai said in a statement.

"As we pursue these consultations, we will continue to

support the Department of the Treasury in the OECD/G20 global

tax negotiations to bring a comprehensive solution to the

challenge of DSTs," Tai said.