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Trump threatens France with punitive tariffs of up to 100 percent for digital taxation

Tuesday, 03.12.2019
02:49 clock

In response to the French digital tax, the US government is considering an increase in tariffs on French imports. "The French tax is not compatible with the prevailing principles of international taxation," said US Trade Representative Robert Lighthizer. The tax discriminate against American companies like Amazon, Apple, Google and Facebook.

  

The government in Washington threatens with punitive tariffs of up to 100 percent on imports worth 2.4 billion US dollars (the equivalent of about 2.2 billion euros). Lighizer has published a list of French cheeses such as Roquefort, as well as yoghurt, sparkling wine, cosmetics and handbags. The actual imposition of duties is to be decided after hearings in January.

  
"Today's decision is a clear signal that the United States will take action against digital taxes that discriminate against or otherwise incriminate US companies," Lighthizer said. Similar tax initiatives from Austria, Italy and Turkey could also be subject to a formal review, he warned. The US government will defend itself against the "increasing protectionism" from Europe against US Internet companies.

  
  Lacking a European or global solution, Paris had introduced digital taxation on its own. Internet companies, which generate more than 25 million euros in sales in France, are therefore expected to pay taxes on local online advertising revenues. Many of the affected companies are based in the US.

  

US President Donald Trump had already described the digital tax as "unfair" in the past and threatened France with punitive tariffs on wine. In July, Lighthizer launched an investigation (the final report can be found here in the original). At the G7 summit in Biarritz in August, French President Emmanuel Macron announced that Trump wanted to forego sanctions for the time being.

  The so-called Gafa tax – named after the initial letters of the Internet companies Google, Amazon, Facebook and Apple – is expected to bring France around 400 million euros this year and about 650 million in the coming year. Economics Minister Bruno Le Maire had only made clear on Monday morning that the French government would stick to the tax. "We will never, never, never give up the will to fairly tax the digital giants in order to have a fair tax system of the 21st century," the minister told France Inter.

  
Trump has arrived at the NATO summit in London

  
Macron and Trump will meet in person on Tuesday. At 3 pm, they are scheduled for a talk on the sidelines of the NATO summit in London. Trump landed at London Stansted Airport on Monday night.

  

The NATO summit officially begins on Tuesday evening with a reception by British Queen Elizabeth II. The two-day summit will address, inter alia, the positioning of the alliance against Russia and China, the state of defense spending and the declaration of space for the military application.

  The meeting is overshadowed by the massive criticism of Macron: He had the Alliance after the Turkish military offensive in northern Syria and the US withdrawal from the region the "brain death" certified. On Tuesday afternoon there will be a four-way meeting on Syria with Macron, German Chancellor Angela Merkel, British Prime Minister Boris Johnson and Turkish President Recep Tayyip Erdogan.

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