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US mulls duties on $2.4 billion in French goods over tech tax

William Horobin, Jenny Leonard and Laura Davison, Bloomberg News on

Published in News & Features

WASHINGTON -- The U.S. proposed tariffs on roughly $2.4 billion in French products, in response to a tax on digital revenues that hits large American tech companies including Google, Apple Inc., Facebook Inc. and Amazon.com Inc.

"France's digital services tax discriminates against U.S. companies," the office of the U.S. Trade Representative said in a statement Monday.

Trade Representative Robert Lighthizer said the agency is also exploring whether to open investigations into similar digital taxes by Austria, Italy and Turkey. The move comes hours after President Donald Trump announced a barrage of other tariffs on steel and aluminum from Argentina and Brazil.

"USTR's decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies," Lighthizer said in the statement. "The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies."

The tariffs would be imposed after a public comment period concludes in early 2020 and interested parties have a chance to weigh in on the proposed duties.

Monday's report concludes more than four-month-long probe, known as a Section 301 investigation, into France's tax regime, which Lighthizer in July said "unfairly targets American companies." The same law was used last year to examine China's intellectual property practices that led to tariffs on more than $360 billion in Chinese goods.

 

Trump in August suggested tariffs of up to 100% on French wine and told aides that while he's not generally empathetic with U.S. tech companies, he believes it should be the U.S. -- not any other country -- that taxes them, people familiar with internal deliberations said.

In the statement Monday, USTR said the proposed action includes "additional duties of up to 100% on certain French products."

Sparkling wine, cheeses, handbags and cosmetics are on the list of potential tariff targets, according to the notice. An official at the French Finance Ministry said Minister Bruno le Maire wouldn't comment on the decision until Tuesday.

The U.S. move is a setback for efforts to stop a conflict over digital tax from intensifying. President Donald Trump and France's Emmanuel Macron agreed in August to try to find a compromise, but a 90-day deadline for talks expired last week without a resolution.

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