U.S. to retaliate following French tax 

03 Dec 2019

Google, Amazon and Facebook are only some of the firms that will be taxed by France, in order to see American tech giants, pay taxes instead of avoiding them by putting headquarters in low-tax European countries. However, Trump looks to be set on adding tariffs on French imports to retaliate. 

France’s tax on the American technology companies consists of a 3% annual levy on French revenues of digital businesses which reach annual global sales of over than $830 million and the French revenue going over $27.7 million. 

But the Office of the US Trade Representative (USTR) stated that following an investigation, the latest French tax targets U.S. companies. In addition, the U.S. described the tax as unfair as it targets the firms’ revenue rather than profits. It is also retroactive.  

The tariffs planned by the U.S. will be on around $2.4 billion worth of French items, ranging from lipstick, handbags, Roquefort cheese as well as sparkling wine. 

The U.S. trade representative, Robert Lighthizer said, “sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies.”

Trump used the same provision used last year for China’s technology policies to investigate the French tax. The USTR looked at Section 301 of the Trade Act of 1974. 

Republicans and Democrats on the Senate finance committee, senators Chuck Grassley and Ron Wyden, released a joint statement saying, “The French digital services tax is unreasonable, protectionist and discriminatory.” 

Trump had already said that Brazil and Argentina will have to pay tariffs on steel and aluminium, tweeting that “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers.”  

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