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Sat, 07 Dec 2019 08:44 GMT

US Tariff Threats: France Says EU Ready to Counteract


7Dnews London

Tue, 03 Dec 2019 12:33 GMT

French government ministers said on Tuesday, December 3rd that France and the European Union are ready to face the latest US tariff threats on French products, Reuters reported.

French Minister of Finance Bruno Le Maire described these American threats as “unacceptable… We were in contact yesterday with the EU to ensure that if there are new American tariffs, there will be a European response, a strong response.

"In case of new American sanctions, the EU would be ready to riposte," Le Maire told Radio Classique.

French Secretary of State for Economy and Finance Agnes Pannier-Runacher told Sud Radio that Paris would be "pugnacious" in its dealings with Washington on the matter and that France would not back down on its digital tax plans.

The United States threatened on Monday, December 2nd, to impose 100% tariffs on $2.4 billion of imports from France, including champagne, handbags, cheese, and other products in retaliation for what the US called “discriminatory” digital service tax.

US Trade Representative Robert Lighthizer said in a statement that the decision "sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies."

French wine, yogurt, and Roquefort cheese are on the latest list of goods that could be targeted as soon as mid-January, according to AFP.

France's 3% levy applies to revenue from digital services realized by companies with more than €25 million ($27.86 million) in French revenue and €750 million ($830 million) worldwide.

But according to the investigation of the US Trade Representative's office, the French tax was "inconsistent with present principles of international tax policy.” The French tax proposal was "unusually burdensome for affected US companies," including Alphabet's Google, Facebook, Apple, and, the office said. 

The announcement of the American decision came just hours before Trump is due to meet his French counterpart Emmanuel Macron on the sidelines of the Nato summit in London on Tuesday.

This decision lowered leading French luxury-goods stocks. Hermes was around 1.9% lower, while LVMH and Kering fell 1.3% and 1.2% respectively in early trading.

Europe US & Canada