Trump administration proposes tariffs on $2.4B in French goods

Dec. 3 (UPI) — The United States said Monday it is considering retaliatory tariffs of up to 100 percent on $2.4 billion in French exports after an investigation found that a new tax by the European nation unfairly targets U.S. tech companies.

Despite U.S. opposition, French President Macron signed legislation in July to apply the nation’s new Digital Services Tax, a 3 percent tax retroactively applied on gross revenue of large companies intended to modernize its tax system.

The office of the U.S. Trade Representative said Monday it has completed an investigation into the DST and concluded it discriminates against U.S. companies, specifically Google, Apple, Facebook and Amazon.

U.S. Trade Representative Robert Lighthizer said the new tax is inconsistent with prevailing tax principles as it was retroactively applied, imposed against revenue rather than income and its purpose is to penalize U.S. tech giants.

“[Our] decision today 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,” Lighthizer said in a statement.

In response, Lighthizer’s office issued a Federal Register Notice proposing additional tariffs — some as much as 100 percent — on French imports, including wine, makeup and handbags.

Jordan Haas, director of trade policy for the Internet Association, said the USTR was defending the Internet with its proposed retaliatory action against France.

“Discriminatory digital services taxes act as a trade barrier for innovative American companies and small businesses often face the biggest burden by them,” he said in a statement. “The French DST is one of a growing number of concerning unilateral tax regimes around the world, and we welcome the announcement from the USTR today.”

The move was also celebrated by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., who called the French digital tax “unreasonable, protectionist and discriminatory.”

“Taking premature action that will adversely and disproportionately affect another [Organization for Economic Co-operation and Development] member state is contrary to the organization’s goals and shouldn’t stand,” they said in reference to the wealthy nations’ organization both countries are members of. “We welcome this step from USTR on behalf of U.S. companies being unfairly targeted and harmed by the French tax.”

Lighthizer added that he’s considering similar investigations against other nations, such as Austria, Italy and Turkey.