Published: Fri, December 06, 2019
Global News | By Blake Casey

France pushes back on U.S. tariff threat

France pushes back on U.S. tariff threat

The US said it would apply tariffs of up to 100% on $2.4bn (£1.8bn) of cheese, Champagne, handbags and other French products.

Boris Johnson is determined to make global tech giants pay more tax in the United Kingdom, despite a similar move in France intensifying a trade war with the US.

He said the potential tariffs were meant to deter other countries from taking similar steps.

The federal agency said that its investigation found France's Digital Services Tax to be "burdensome" for the affected us companies.

Mr. Lighthizer announced potential tariff, which will now enter a period of public comment, at the end of the investigation office of the French tax.

French Finance Minister Le Maire described the USA move as "unacceptable" and promised a "strong" European response.

Prime Minister Johnson spoke about the situation in an election campaign, saying: "On the digital services tax, I do think we need to look at the operation of the big digital companies and the huge revenues they have in this country and the amount of tax that they pay".

This issue risks adding to tensions between France and the United States, after Trump also took umbrage at comments by President Emmanuel Macron casting doubt on the effectiveness of North Atlantic Treaty Organisation.

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"The United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on USA companies", Ambassador Robert Lighthizer said Monday. I don't want France to be taxing American companies. This is mainly being done in retaliation by the French Government to impose a new digital services tax.

This Tax will go into effect from early 2019 and is expected to bring in 400 M Euros. The DST is created to combat the practice of large companies using tax havens to avoid paying high rates of tax.

Amazon retaliated to the new tax by raising fees for French businesses by 3%. This could act as a roadblock in the OECD's broad effort to have 135 countries agree on how to tax multinational corporations and prevent them from shifting profits to tax havens.

"French taxation on the digital giants aims to restore fiscal justice", he said. President Donald Trump had already made it clear that he would levy additional taxes on French wines and other products.

But some United States business lobby groups had warned against tariffs because of fears of escalating another trade fight, despite their opposition to the French law.

Mr Le Maire said that the threats coming out of Washington were "unacceptable", and said that the European Union could strongly retaliate if necessary.

This expected retaliation from the U.S. could make troubling reading for the United Kingdom party leaders.

Trump says that's aimed squarely at the likes of Google and Amazon. Now, a dispute over a tax on digital services might significantly impact the price of your Champagne.

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