US Threatens 100% Tariffs on French Imports

The threat of punitive tariffs came after a US 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.

The French digital tax aims prevent tech companies from dodging taxes by reporting their earnings in low-tax European Union countries.

On Monday, US trade officials said that they had investigated the measure and found it was "unusually burdensome for affected US companies", according to a statement.

French Finance Minister Bruno Le Maire branded the United States threat unacceptable and said the French tax did not discriminate against American companies.

The U.S. trade agency said it would collect public comments through January 14 on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for January 7.

It said the tax was "unusually burdensome" for USA companies including Alphabet Inc's Google, Facebook Inc, Apple Inc and Inc. In a separate press release, it also recommends new tariffs and says that there could be more investigations into the digital taxes of Austria, Italy and Turkey.

It did not specify an effective date for the proposed 100% duties.

The U.S. Trade Representative proposed the tariffs on $2.4 billion in goods Monday in retaliation for a French tax on global tech giants including Google, Amazon and Facebook.

The tariff spat marks a new low in relations between French President Emmanuel Macron and Trump, who will meet on the sidelines of the North Atlantic Treaty Organisation summit later on Tuesday.

PARIS (AP) - France is threatening a "strong European riposte" if the Trump administration follows through on a proposal to hit French cheese, Champagne, handbags and other products with tariffs - of up to 100%. The two struck a compromise in August at a G7 summit in France that would refund US firms the difference between the French tax and a new mechanism being drawn up through the Organization for Economic Cooperation and Development.

Senators Chuck Grassley and Ron Wyden, the bipartisan duo leading the Finance Committee, called the French digital services tax "unreasonable, protectionist and discriminatory", in a statement. But French Finance Minister Le Maire said ahead of the USTR announcement that the US has backed off from supporting an OECD compromise.

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

Gruyere cheese, also spared from the USTR aircraft tariffs levied in October, featured prominently in the list of French products targeted for 100% duties, along with numerous other cheeses. "We will never abandon our will to tax digital giants in a fair way". It only targets businesses with yearly global sales of over €750 million and make over €25 million in France.

The new law, which is set to retroactively go into effect from early 2019, will see a 3% tax imposed on revenue of digital services that happen within France.

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