Deductions & credits

It depends.  In reading this IRS publication, 

1. You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. If you examine this, the bank withheld tax from the interest paid and paid this to the foreign government for safekeeping.
2. It also mentions in the publication that The amount of foreign tax that qualifies as a foreign tax credit is not necessarily the amount of tax withheld by the foreign country. If you are entitled to a reduced rate of foreign tax based on an income tax treaty between the United States and a foreign country, only that reduced tax qualifies for the credit.  It is up to you whether you want to file  with the foreign country  for a refund of the difference (excess) for which a foreign tax credit is not allowed.
3. The second point seems to suggest that you could file a US tax return but you may only be given credit for a reduced amount of the tax whereas if you file with the foreign country, you may receive a full refund. 

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