Trump administration proposes tariffs on $2.4B in French goods
The U.S. Trade Representative on Monday said that it has determined that France’s digital services tax discriminates against U.S. companies, and is proposing tariffs of up to 100 percent on $2.4 billion of French products.
“USTR’s decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies,” U.S. Trade Representative Robert Lighthizer said in a news release.
USTR in July announced an investigation into the French digital services tax, in order to determine whether it’s unreasonable or discriminatory and burdens U.S. commerce. The investigation took place under section 301 of the U.S. Trade Act of 1974, the same section that Trump has used to justify tariffs on Chinese goods.
USTR announced last week that it would be issuing its findings in its investigation Monday, after a 90-day deadline for negotiations between the U.S. and France expired.
French President Emmanuel Macron signed legislation in July to establish a 3-percent tax on large companies’ revenues from digital services. The tax applies retroactively to Jan. 1.
The tax has drawn criticism from major U.S. tech companies — such as Google, Facebook and Amazon — as well as from policymakers on both sides of the aisle, who argue that the law is targeting American businesses.
Silicon Valley largely applauded the USTR’s conclusion on Monday night, deriding the French proposal as an effort to harm the world’s largest tech companies, most of which are based in the U.S.
“We encourage other member states considering similar actions to work within the OECD framework toward a comprehensive solution,” the senators added.
“The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies, whether through digital services taxes or other efforts that target leading U.S. digital services companies,” he said.
Emily Birnbaum contributed to this story.