The United States announces a 25% tax on French products in response to the tax on digital services in France
Saturday July 11, 2020 – 08:16 UTC
The Trump administration announced Friday 25% additional duties on French cosmetics, handbags and other imports valued at US $ 1.3 billion in response to the tax on digital services in France, but would suspend the implementation implementation of the decision for 180 days.
The office of the US trade representative said delaying the start of tariffs would give more time to resolve the problem, including through discussions in the Organization for Economic Co-operation and Development (OECD). This decision also reflected France’s agreement to postpone the collection of its 3% tax on digital services.
The U.S. decision follows a U.S. section 301 investigation that found French tax discriminated against U.S. tech companies such as Google, Facebook and Apple Inc.
France and other countries see taxes on digital services as a way to increase revenues from local operations of large tech companies, which they say benefit enormously from local markets while making only limited contributions to public coffers .
The American trade representative, Robert Lighthizer, unveiled for the first time Thursday his intention to impose new tariffs on French products with a deferred application. The $ 1.3 billion worth of goods are part of a list first published by the USTR in December.
The United States has launched similar section 301 investigations into digital service taxes adopted or contemplated by 10 other countries, including Britain, India and Turkey, which could potentially result in tariffs. customs on their goods.
OECD talks to develop a multilateral solution to tax digital services have been unsuccessful, as negotiations have been complicated by the coronavirus pandemic.
Last month, US Treasury Secretary Steven Mnuchin surprised European countries when he suggested a pause in the OECD talks given the lack of progress there.
An EU spokesperson told Reuters earlier that Brussels could come up with its own solution if the OECD talks fail to reach an agreement. He urged Washington to resume talks.