The US government on Monday (December 2nd) threatened to impose additional tariffs of up to 100% on the equivalent of $ 2.4 billion (about 2.15 billion euros ) French products in response to the introduction in France of a tax on the digital giants of the United States.
This announcement – made on the eve of a meeting between US President Donald Trump and his French counterpart, Emmanuel Macron – comes after an investigation opened in July by the US Trade Representative (USTR) concluding that this French GAFA legislation (Google, Apple, Facebook and Amazon) is damaging to US companies.
Among the products that could be surcharged are many cheeses including Roquefort, yogurt, sparkling wine as well as cosmetics such as soap and makeup or handbags. For now, the Trump administration seems to be sparing the traditional wine, one of the most iconic tricolor export products, already already under US retaliation in another commercial dispute over European subsidies to Airbus.
The USTR estimates, in its conclusions, that the French tax, adopted last July, is not "Not in line with international tax policy principles and an abnormal burden for affected US companies".
Investigation possible also against Austria, Italy and Turkey
The proposal, which is yet to receive the approval of Mr Trump, risks intensifying friction with the European Union. Tuesday, the French Minister of the Economy, Bruno Le Maire, qualified "Unacceptable" American threats. "This is not the behavior expected of the United States vis-à-vis one of its main allies, France, and generally Europe"said Le Maire on Radio Classique. Monday, well before the announcement of this proposal, the minister had already warned that France would not give up " never " its tax on GAFA and reproached the United States for wanting a large international agreement on digital taxation.
As is customary, the imposition of such punitive tariffs will be preceded by a period of public consultations to consider any requests for exemption. The implementation of such a threat will not be able to intervene before mid-January, according to the calendar unveiled by the USTR.
"The USTR report sends a clear signal to France and warns other countries that are finalizing similar measures that discriminatory taxes will not be tolerated"responded Matt Schruers, Executive Director of the Federation of Computer and Communications Industry (CCIA), in a statement.
He was referring to the fact that the Trump administration is also planning to open an investigation against Austria, Italy and Turkey to determine whether their taxes are threatening US companies.
The French GAFA tax imposes these digital giants to the tune of 3% of the turnover achieved in France, especially on targeted advertising online, the sale of data for advertising purposes and the linking of Internet users by the platforms. This solution is intended to be only temporary pending the outcome of international negotiations.
Major issue
The G20 finance ministers, meeting in Washington on October 18, paved the way for crucial and complex negotiations within the Organization for Economic Co-operation and Development (OECD) on this issue, with the goal of achieving a global agreement by June.
The taxation of digital giants and multinationals is a major challenge to adapt global taxation to the digitization of the economy of recent decades, so that states can collect taxes, even if the groups are not physically present on their territory.
This summer, after the definitive adoption of the tax in France, Donald Trump had himself stepped up to the plate on this issue and had let out his anger. He had then denounced "Stupidity" President Emmanuel Macron and threatened to retaliate French wine.
As early as this summer, Paris had committed to abandon its tax, which comes into effect this year, as soon as an international solution has been found under the auspices of the OECD. "After calling for an international solution at the OECD, (Washington) is not sure of wanting it », lamented Monday Bruno Le Maire.
For his part, Frenchman Thierry Breton, the new European Commissioner for the Single Market and Digital, has gone further and suggested that US Treasury Secretary Steven Mnuchin could announce the withdrawal of the United States from the negotiations of the United States. OECD.
