France pushes back on US tariff threat

France’s finance minister is threatening a “strong European riposte” if the Trump administration follows through on a proposal to hit French cheese, Champagne, handbags and other products with tariffs of up to 100 per cent.

The US Trade Representative proposed the tariffs on $2.4 billion in goods Monday in retaliation for a French tax on global tech giants, including Google, Amazon and Facebook.

The move, which is likely to increase trade tensions between the United States and Europe, came ahead of a meeting Tuesday between President Donald Trump and French President Emmanuel Macron.

“It’s simply unacceptable,” French Finance Minister Bruno Le Maire said Tuesday on Radio Classique. “It’s not the behaviour we expect from the United States towards one of its main allies.”

Le Maine said the French tech tax is aimed at “establishing tax justice.” France wants digital companies to pay their fair share of taxes in countries where they make money and is pushing for an international agreement on the issue.

While insisting that a trade war is “not in anyone’s interest,” Le Maine said France talked this week with the European Commission about EU-wide retaliatory measures if Washington follows through with the tariffs next month.

The US tariffs could double the price American consumers pay for French imports and would come on top of a 25 per cent tax on French wine imposed last month over a separate dispute over subsidies to Airbus and Boeing.

The Office of the US Trade Representative charged Monday that France’s new digital services tax discriminates against US companies.

Le Maine disputes that, saying it targets European and Chinese businesses, too. The tax imposes a three per cent annual levy on French revenues of any digital company with yearly global sales worth more than €750 million (US$830 million) and French revenue exceeding €25 million.

“What we want is a plan for international tax that is on the table” at the Organisation for Economic Co-operation and Development, Le Maine said.

The US investigated the French tax under Section 301 of the Trade Act of 1974 – the same provision the Trump administration used last year to probe China’s technology policies, leading to tariffs on more than US$360 billion worth of Chinese imports in the biggest trade war since the 1930s.

AP