WASHINGTON, United States (AFP) — The United States on Monday threatened to impose tariffs of up to 100 percent on $2.4 billion in French goods in retaliation for a digital services tax it says is discriminatory.
French sparkling wine, yogurt and Roquefort cheese are on the list of goods that could be targeted as soon as mid-January after a report from the US Trade Representative’s (USTR) office found the digital tax penalizes American tech companies such as Google, Apple, Facebook and Amazon.
The decision “sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies,” US Trade Representative Robert Lighthizer said in a statement.
Lighthizer also warned that Washington was considering widening the investigation to look into similar taxes in Austria, Italy and Turkey.
“The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets US companies, whether through digital services taxes or other efforts that target leading US digital services companies,” he said.
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The announcement came just hours before President Donald Trump is due to meet his French counterpart Emmanuel Macron on the sidelines of the NATO summit in London on Tuesday.
The French tax, enacted earlier this year, imposes a three percent levy on the revenues earned by technology firms in France, which often come from online advertising and other digital services.
The tax affects companies with least 750 million euros ($830 million) in annual global revenue on their digital activities.
The French tax targets revenue instead of profits, which are often reported by tech giants in low-tax jurisdictions like Ireland in a practice that has enraged governments.
The USTR report “concluded that France’s Digital Services Tax (DST) discriminates against US companies, is inconsistent with prevailing principles of international tax policy and is unusually burdensome for affected US companies.”
After the tax was enacted, Trump in July vowed “substantial” retaliation for the French measure.
The USTR has scheduled public hearings on the proposal to imposes “duties of up to 100 percent on certain French products,” and the possibility of “imposing fees or restrictions on French services.”
