The U.S. government has announced it may slap tariffs of up to 100% on some French imports in retaliation for a French digital tax.
The French Parliament passed a new law on July 11 to impose a tax on digital giants, including US companies Google, Amazon, Facebook and Apple, and its finance minister cited that the tax is necessary to make internet giants pay their fair share of taxes.
The Office of the U.S. Trade Representative charged Monday that France's new digital services tax discriminates against U.S. companies.
The findings won favor from US lawmakers and USA tech industry groups, who have long argued that the tax unfairly targets U.S firms.
Earlier Monday, French Finance Minister Bruno Le Maire appeared to not have much confidence in the DST going over well with the Trump administration and predicted Washington was likely to respond with tariffs.
The U.S. trade agency said it would collect public comments through January 14 on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for January 7. He added the USA could investigate similar taxes by Austria, Italy and Turkey.
It said the tax was "unusually burdensome" for USA companies including Alphabet's Google, Facebook, Apple and Amazon.
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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.
The USTR has scheduled public hearings on the proposal to impose "duties of up to 100 percent on certain French products" and the possibility of "imposing fees or restrictions on French services".
The list of French products subject to potential duties includes cosmetics, porcelain, soap, handbags, butter, and several kinds of cheeses, including Roquefort, Edam and Gruyere.
The U.S. move is a setback for efforts to stop a conflict over digital tax from intensifying.
His agency investigated the French tax under Section 301 of the Trade Act of 1974 - the same provision the Trump administration used past year to probe China's technology policies, leading to tariffs on more than $360 billion worth of Chinese imports in the biggest trade war since the 1930s. The US has also prepared to broaden tariffs against the bloc as part of a long-running dispute over aircraft subsidies. "I've always said American wine is better than French wine!"
"They've said they aren't sure they want a solution at the OECD", Le Maire said on radio station France Inter. Ron Wyden. In a joint statement, they assailed the French digital tax as "unreasonable, protectionist and discriminatory".
"We will not give up on taxation" of digital firms, the official said. France wants digital companies to pay their fair share of taxes in countries where they make money instead of using tax havens, and is pushing for an worldwide agreement on the issue. The tax applies to companies with global revenue of at least 750 million euros and digital sales of at least 25 million euros in France.