Trump administration threatens tariffs on French cheese, champagne over France’s digital services tax

President Donald Trump and French President Emmanuel Macron in Paris. (Photo: Thibault Camus, AP)

WASHINGTON – President Donald Trump’s administration proposed Monday slapping stiff tariffs on $2.4 billion in French products including cheese and champagne in retaliation for France’s new digital services tax.

In a report released just hours before Trump is scheduled to meet with French President Emmanuel Macron in London, the U.S. Trade Representatives’ Office said tariffs of as much as 100 percent are under consideration because France’s digital services tax discriminates against U.S. companies such as Google, Apple, Facebook and Amazon.

The decision “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,” Ambassador Robert Lighthizer said in a statement.

Lighthizer said the Trump administration also is considering opening investigations into digital services taxes of Austria, Italy and Turkey.

France’s digital services tax has been a flash point between the France and the U.S. since it was approved last July. The 3 percent levy would be placed on yearly revenues of companies that provide services in France and have global revenues of at least 25 million euros ($28 million) in France and 750 euros ($837 million) worldwide every year.

In July, Trump threatened to slap on French wines in retaliation for the tax. But the president of the European Council put Trump on notice during the Group of Seven summit in southwest France that the E.U. would stand with France and “respond in kind” if Trump followed through with that threat.

In its report, the U.S. Trade Representative’s Office said France’s digital services tax not only discriminates against U.S. companies but is “unusually burdensome” and “inconsistent” with the principles of international tax policy.

The administration suggested retaliatory tariffs against 63 French product lines, including cheeses, champagne, butter, yogurt, soap, makeup, handbags and porcelain.

A notice to be published in the Federal Register seeks public comment on the possible duties as well as the option of imposing fees or restrictions on French services.

The tariffs could be a topic of discussion when Trump meets Tuesday with Macron at a gathering of NATO leaders in London.

Source: Read Full Article