The US government last week announced a 25 per cent tariff on $1.3 billion worth of French merchandise, including handbags, after France levied a digital service tax on US technology companies like Facebook, Google and Amazon that the former perceived as unfair. Terming the French tax ‘unreasonable or discriminatory’, the office of the US Trade Representative said it ‘burdens or restricts US commerce’.
The White House had initiated an investigation into the French tax last year.The United States recently announced a 25 per cent tariff on $1.3 billion worth of French goods, including handbags, after France levied a digital service tax on US technology firms that the former perceived as unfair.Terming the French tax 'unreasonable or discriminatory',the office of the US Trade Representative said it 'burdens or restricts US commerce'.#
“Retaliatory tariffs aren’t ideal but the French government’s refusal to back down from its unilateral imposition of unfair and punitive taxes on U.S. companies leaves our government with no choice,” Senate finance chair Chuck Grassley and ranking member Ron Wyden reportedly said in a joint statement supporting President Donald Trump’s decision.
France is expected to collect approximately $450 million in taxes from US companies for activities during 2020, and over $500 million for activities in 2021, US media reported citing the statement.
The French tax is aimed at preventing tech companies from evading taxes by setting up their headquarters in low-tax European Union member states. It imposes a 3 per cent annual levy on French revenue of digital companies with yearly global sales worth more than $848 million and French revenue exceeding €25 million.
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