US Targets French Luxury Sector With New Tariffs – Robb Report


It seems that the United States is entering a new tariff war with France. And the results could hit the country of fine chocolate and haute couture where it hurts the most: the luxury sector.According to the office of the United States Trade Representative (USTR), a list of imports from France worth $ 1.3 billion could be collected with an additional customs duty of 25% if the two countries fail to a trade agreement. The compiled list includes everything from personal care and beauty products to handbags with an “exterior reptile leather surface”.

The financial battle comes after the French government, led by President Emmanuel Macron, has declared its intention to start taxing the biggest tech giants in Silicon Valley. The move was critically important to Yellow Vest protesters who believe Google and Amazon are killing small businesses and posing serious privacy concerns. The GAFA tax (named after Google, Apple, Facebook and Amazon) would reduce revenue generated in France for technology companies based abroad by 3%.

The 25% additional duty on French imports is temporarily suspended and will remain so for 180 days, but will come into force in January if no resolution is established by then. By threatening the upside, the United States could harm some of the largest French conglomerates, including LVMH, Loreal, Kering and Herm├Ęs. The US administration considers any tax on its tech companies to be unreasonable, however “France’s response will be unchanged,” said the country’s finance minister, Bruno Le Maire, in Brussels this week. “If there is no international solution by the end of 2020, we will apply, as we have always said, our national tax.”

But this is not the only example in recent history where the United States has indicated the use of high tariffs on French imports. In October of last year, just a few months before the coronavirus became a pandemic, a 25% tariff was imposed on French wine and additional tariffs on French sparkling wine should be implemented in 2021.


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