Slaps French Goods
The U.S. Trade Representative’s office said delaying the start of the tariffs would allow further time to resolve the issue, including through discussions in the Organisation for Economic Co-operation and Development (OECD). The decision also reflected France’s agreement to defer the collection of its 3% tax on digital services. (slaps French goods)
The U.S. move follows a U.S. Section 301 probe, which concluded the French tax discriminates against U.S. tech firms such as Google, Facebook, and Apple Inc.
France and other countries view digital service taxes as a way to raise revenue from the local operations of big tech companies which they say profit enormously from local markets while making only limited contributions to public coffers. (slaps French goods)
U.S. Trade Representative Robert Lighthizer first disclosed on Thursday plans to impose new tariffs on French goods with deferred implementation. The $1.3 billion worth of goods is part of a list first published by USTR in December. (slaps French goods)
The United States has initiated similar Section 301 investigations of digital services taxes adopted or being considered by 10 other countries, including Britain, India and Turkey, which could result in tariffs against their goods.
OECD talks aimed at developing a multilateral solution for taxing digital services have failed to produce any results, with negotiations complicated by the coronavirus pandemic. (slaps French goods)
Last month, U.S. Treasury Secretary Steven Mnuchin caught European countries by surprise when he suggested a pause in the OECD talks given the lack of progress there.
A spokesman for the European Union told Reuters earlier that Brussels could propose its own solution if the OECD talks failed to produce an agreement. He urged Washington to resume the talks. (slaps French goods)
(Additional reporting by David Lawder; Editing by Sandra Maler and Aurora Ellis)