The US government will investigate whether a French plan to tax American technology companies is fair, and it could potentially issue retaliatory tariffs in response, according to a report by The Financial Times.
The US trade representative, Robert Lighthizer, said that he would carry out a Section 301 investigation into France’s digital services tax. Lighthizer said the tax unfairly spotlights American companies.
The move could potentially lead to tariffs on French items like wine or automobiles, although both parties would have to try and reach a negotiated settlement before it gets to that.
“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” Lighthizer said. “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”
A source in the Finance Ministry in France told the FT that the tax was completely compliant with all international agreements and that it wasn’t appropriate to potentially threaten trade tariffs because of it.
On Thursday, July 11, senators in France voted on the passage of the tax, which will put a charge of 3% on a company’s turnover if it has revenues higher than €750 million (US$845.5 million) worldwide and €25 million (US$28.2 million) in France.
Some of the affected companies would include Apple, Facebook
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