France, EU 'ready to retaliate' against United States tariffs

Wednesday, 04 Dec, 2019

But on Tuesday the president said he liked the idea of "waiting until after the election" to make a pact with Beijing, adding: "We'll see whether or not there's a deal".

Le Maire told Radio Classique on Tuesday that the USA threat was unacceptable.

The European Commission, the EU executive, said the 28-nation EU would act as one and that the best place to settle disputes was at the World Trade Organization. "Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the USA from those countries", Trump wrote. "French taxation on the digital giants aims to restore fiscal justice". "It does not only target US companies but also Chinese or European companies". "France said yes to this project".

US Commerce Secretary Wilbur Ross on Tuesday said that while staff-level talks are continuing with Chinese officials, no high-level meetings are scheduled.

The threat of punitive tariffs came after a U.S. government investigation found France's new digital services tax would harm USA technology companies, and will intensify a festering trade dispute between Europe and the United States. It would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than €750m ($830m) and French revenue exceeding €25m ($27.7m). It retroactively applies to revenue generated since January 1, 2019.

In London for a North Atlantic Treaty Organisation summit, Trump and Macron exchanged a tight-gripped handshake before both said they hoped they could smooth out their differences over the increasingly inflammatory issue.

Additional duties of up to 100 percent have been suggested, alongside "the option of imposing fees or restrictions on French services".

The full list of French products subject to potential duties includes cosmetics, porcelain, soap, handbags, kitchen equipment, butter and several kinds of cheeses, including Roquefort, Edam and Gruyere.

The USTR was focusing on countering the "growing protectionism of European Union member states" and may also open 301 investigations into the digital services tax against Turkey, Austria and Italy, Mr Lighthizer said.

Trump also said that it would only be fair for South Korea to shoulder a heavier burden for the USA military presence there.

USTR Ambassador Robert Lighthizer said the action "sends a clear signal that the United States will take action against digital tax regimes that discriminate", and that the regulatory body will counter the growing "protectionism" of European Union member states.

"Indeed, USTR is exploring whether to open Section 301 investigations into the digital services taxes of Austria, Italy, and Turkey".

The French tax law is expected to raise approximately €400m ($443) this year, the BBC reported.

Le Maire said France will reimburse the tax if the United States agrees to the worldwide tax plan. His government is trying to use the national tax as a bargaining chip in its push for an agreement under the OECD. In July, president Trump voiced frustration at the introduction of the DST via his personal Twitter profile.

Industry groups welcomed the report, with the Information Technology and Innovation Foundation saying in a statement that France's tax is "narrowly and inappropriately targeted to raise revenue only from the largest companies in a small set of industries, many of them American". "If anybody taxes them, it should be their home Country, the US", he wrote.

USA officials reportedly asked France to refrain from adopting the new legislation and called for an open discussion on the matter. It called the French tax "one of a growing number of concerning unilateral tax regimes around the world".

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