European Union Ready To Fight Back Over US Tariff Threat, Says France

The United States says a French digitax services tax unfairly targets American tech companies such as Google Apple Facebook and Amazon

The United States says a French digitax services tax unfairly targets American tech companies such as Google Apple Facebook and Amazon

French Finance Minister Bruno Le Maire said the European Union "would be ready to retaliate strongly" against USA sanctions.

The Trump administration has threatened to impose 100 per cent tariffs on up to $2.4bn of French goods, including champagne, after concluding that the country's digital services tax unfairly discriminated against USA technology companies.

Commerce Secretary Wilbur Ross, speaking on CNBC television on Tuesday, said the USA will go ahead with its plan to add tariffs on Chinese products if nothing changes come mid-December.

Le Maire said France talked this week with the European Commission about EU-wide retaliatory measures if Washington follows through with the tariffs next month.

On the eve of U.S. President Donald Trump meeting his French counterpart Emmanuel Macron in London on the sidelines of the North Atlantic Treaty Organisation alliance talks, the U.S. announced that it could levy up to 100% on $2.4 billion in French imports of into the country.

France's 3% levy applies to revenue from digital services earned by companies with more than $27 million of revenues from France and $830 million worldwide.

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".

"Brazil and Argentina have been presiding over a massive devaluation of their currencies which is not good for our farmers", Trump tweeted, adding: "Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the United States from those countries". Trump also took the opportunity to criticise Macron, saying that the French president sometimes does things that are "counterproductive to his country".

Shares in French luxury companies fell in response to the tariff threat against French champagne, handbags, cheeses and other products.

The "301" trade probe against France was launched in July after Mr Macron signed the DST into law, aimed at taxing digital companies that did substantial business in France.

The French experience serves as a warning as the United Kingdom seeks to withdraw from the European Union and strike global trade deals - including with the US.

Speaking ahead of talks with Macron and other Western leaders at the North Atlantic Treaty Organisation summit in Britain, Trump condemned the French tax while insisting he was "not in love with those companies, Facebook, Google, all of them".

Lighthizer had also warned that Washington was considering widening the investigation to look into similar taxes in Austria, Italy and Turkey.

French Economy Minister Bruno Le Maire on Tuesday promised a "strong" European Union response to threatened USA tariffs on French goods, as another front split open in the United States trade war.

The reality is that the digital tax doesn't target U.S. companies alone as it also affects Chinese, German, British and even French tech companies.

"I'm not going to let people take advantage of American companies", Trump said Tuesday.

French President Emmanuel Macron and his U.S. counterpart Donald Trump on Tuesday appeared unwilling to lay down their arms in an escalating spat over Paris's plans for a special tax on digital service companies and Washington's threat to retaliate with massive tariffs on French imports.

Despite widespread complaints about the impact of the tariffs on U.S. businesses and consumers, as well as the hit to farmers who have been the target of retaliation from trading partners, Trump claimed in his tweet on Monday that Washington has taken in "massive amounts of money" from the tariffs. MSCI's measure of global stock performance slid 0.9 percent, while the U.S. benchmark S&P 500 Index dropped 1.22 percent, its largest fall in almost two months.

Another potential threat to the outlook emanating from US policy is a currency war, in which nations go against their Group of 20 pledges and target foreign-exchange rates for domestic economic benefit.

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