US Wants To Put 100% Tariffs On $2.4B French Imports

The office of the U.S. Trade Representative on Monday proposed to impose up to 100% additional duties on certain French imports worth $2.4 billion.

What Happened

The federal agency said that its investigation found France’s Digital Services Tax to be “burdensome” for the affected U.S. companies. 

It said that internet-based companies Alphabet Inc GOOGL, Apple Inc AAPL, Facebook Inc FB, and Amazon.com Inc AMZN are particularly discriminated against by the French laws.

The USTR said that the French DST is “inconsistent with prevailing tax principles” due to its nature of “retroactivity,” its application to “revenue rather than income,” and its “purpose of penalizing particular U.S. technology companies.”

The French DST enacted in July levies a 3% tax on companies earning more than $27 million (€25 million) in revenue in France and $830 million (€ 750 million) worldwide. 

All of the tech giants listed as affected companies by the USTR testified against the law, Reuters reported in August.

The import duties will be increased on some of France’s most popular products worth $2.4 billion, including various types of Cheeses, Handbags, sparkling wine, and personal care and cosmetics items.

What’s Next

The USTR is inviting comments on the matter ahead of a public hearing scheduled on January 7. The trade agency expects to “proceed expeditiously thereafter.”

The federal agency is also looking into whether it should open similar investigations against Austria, Italy, and Turkey, according to Trade Representative Robert Lighthizer.

“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,” Lighthizer said.

France had disputed the fact that American companies are particularly targeted by its tax law ahead of the USTR announcing its findings, Reuters reported. 

“We will not give up on taxation,” of the digital firms, a French official said, according to Reuters.