Trump Threatens Retaliation Over France's Digital Tax

Sunday, 28 Jul, 2019

U.S. President Donald Trump on Friday denounced France for its recently passed digital services tax law, and threatened "a substantial reciprocal action".

Reaction to Trump's tirade was swift with Baltimore Mayor Bernard C. Jack Young tweeting that it was "completely unacceptable for the political leader of our country to denigrate a vibrant American City like Baltimore, and to viciously attack U.S. Representative Elijah Cummings a patriot and a hero".

The move is aimed at stopping multinational companies from avoiding taxes by setting up headquarters in low-tax European Union countries. "Where for so many people on these issues, you read tweets like that and you either know in your gut or your heart what's being said or you want to play a semantic game".

"We will announce a substantial reciprocal action on Macron's foolishness shortly", he said, adding later: "Might be on wine or something else".

That's rattling French vintners, who sold 1.6 billion euros ($1.78 billion) worth of wine a year ago to American consumers. "I took you at your word", he said in his final tweet, linking to a 2017 letter by House Democrats expressing disappointment that Mr. Trump did not work with them on lowering prescription drug prices.

'I don't drink wine. "I gorgeous enjoy the ability they explore".

France occupies a prominent place among the largest exporters of wine to the USA market.

French Finance Minister Bruno Le Maire says France will proceed with taxing revenues of big technology firms and is urging the U.S. not to bring trade tariffs into the debate on how to fairly raise levies on digital services.

"Universal taxation of digital activities is a challenge for us all".

Both Lighthizer and Treasury Secretary Steve Mnunchin called Le Maire ahead of a vote in the French Senate to warn him America would investigate such a tax.

Deputy White House spokesman Judd Deere noted that France's digital services tax was already the subject of an investigation at the U.S. Trade Representative's office, potentially opening the door to economic sanctions.

"Why don't they go back and help fix the totally broken and crime infested places from which they came", wrote the president. "The fact that these companies pay less tax than a cheese producer in Quercy is a real problem", Economy Minister Bruno Le Maire explained in an interview in the Le Parisien newspaper on 3 April.

Part of the frustration among some in Trump's base is that for many years, liberals attempted to marginalize them.

The tech tax is just their latest battleground, and will be a key tension point when the two men meet at a Group of Seven summit in France next month.

An EU levy would require consensus amongst contributors, but Ireland, the Czech Republic, Sweden and Finland raised objections. Nevertheless, France and some other countries chose to implement the tax on a national level, while Washington has claimed that the bill is "discriminatory" and warned of WTO actions. Duties on France are less likely to directly affect the tech giants-the country's top exports to the US include aircraft components, liquor, medication and, yes, wine. Chinese, German, Spanish and British firms are also affected, as well as the French online advertising firm Criteo.