United States mulls response to France's digital tax


The U.S. Trade Representative proposed the tariffs on $2.4 billion in goods Monday in retaliation for a French tax on global tech giants including Google, Amazon and Facebook.

France and the European Union are ready to fight back over the latest United States tariff threats on French products, French government ministers said on Tuesday.

The Office of the US Trade Representative says France's new digital services tax discriminates against US companies and says that the tariffs could reach 100%.

"In case of new American sanctions, the European Union would be ready to riposte", Le Maire told Radio Classique.

The U.S tariffs could double the price American consumers pay for French imports and would come on top of a 25% tax on French wine imposed last month over a separate dispute over subsidies to Airbus and Boeing.

He later told a press conference: "We are not targeting any country".

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France's three percent levy applies to revenue from digital services earned by companies with more than 25 million euros (27.86 million USA dollars) of revenues from France and 750 million euros (830 million US dollars) worldwide.

It said the tax was "unusually burdensome" for US companies including Alphabet Inc's Google, Facebook Inc, Apple Inc and Amazon.com Inc.

Hermes was around 1.9pc lower, while LVMH and Kering fell 1.3pc and 1.2pc respectively.

According to the USTR's notice of action against France's DST, written comments will be accepted for consideration until January 6, 2020, and a public hearing will take place the following day.

However, the US Chamber of Commerce warned that the new set of tariffs "may elicit additional rounds of retaliatory measures that represent a substantial risk to US economic growth and job creation".

The United States has already imposed 25pc duties on French wine and cheese as part of its WTO-sanctioned response to illegal European Union aircraft subsidies, a move exporters warned would penalise U.S. consumers while severely hurting French producers.