Published: Tue, December 03, 2019
Markets | By Otis Pena

European Union Ready To Fight Back Over US Tariff Threat, Says France

European Union Ready To Fight Back Over US Tariff Threat, Says France

The Trump administration has threatened to impose 100 per cent tariffs on up to $2.4bn of French goods, including champagne, after concluding that the country's digital services tax unfairly discriminated against USA technology companies.

The threat of punitive tariffs came after a USA government investigation found France's new digital services tax would harm US technology companies, and will intensify a festering trade dispute between Europe and the United States.

The trade office hasn't said when the additional tariffs would kick in.

"In case of new American sanctions, the European Union would be ready to riposte", Le Maire told Radio Classique. The tax imposes a 3% annual levy on French revenues of any digital company with yearly global sales worth more than 750 million euros ($830 million) and French revenue exceeding 25 million euros.

Any retaliatory action from France would have to be taken at an EU-wide level because the 28-nation bloc is a customs union, which applies duties at its border.

Sparkling wines had been left off that list of tariffs but are a target this time around, along with handbags, porcelain, cheeses, yoghurt and other French products.

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He later told a press conference: "We are not targeting any country".

French junior economy minister Agnes Pannier-Runacher told Sud Radio that France would be "pugnacious" in its dealings with the United States on the matter, and that France would not back down on its digital tax plans.

The tariff spat marks a new low in relations between French President Emmanuel Macron and Trump, who will meet on the sidelines of the North Atlantic Treaty Organisation summit later on Tuesday.

France's junior economy minister Agnes Pannier-Runacher said on Tuesday: "It is very clear that we do not need to go back on this, with regards to a topic that economically speaking makes sense", referring to the digital tax.

"The United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies", Ambassador Robert Lighthizer said Monday.

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