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France says ready to challenge US’s tariff threat at WTO

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
French Finance and Economy Minister Bruno Le Maire addresses the “day of the automobile industry” meeting at the Economy Ministry in Paris on December 2, 2019. (Photo by AFP)

France says it is ready to challenge the United States at the World Trade Organization (WTO) over Washington’s threat to slap tariffs on French goods in retaliation to a French tax targeting American technology companies.

Back in July, the French parliament passed the “digital tax” law, which mainly targets American technology giants like Google, Apple, Facebook and Amazon.

The French government has long complained about such American firms not paying enough tax on revenues raised in the European country.

The digital tax law, which is due to kick in retroactively from the start of 2019, imposed a three percent levy on revenues from digital services gained in France by companies with over €25 million in French revenue and €750 million ($845 million) worldwide.

At the time, US President Donald Trump promised to announce “substantial reciprocal action” to what he called “[French President Emmanuel] Macron’s foolishness.”

On December 2, Washington threatened to slap punitive duties of up to 100 percent on $2.4 billion’ worth of French products, including alcoholic drinks, cheese and handbags, in retaliation for France’s new law, dubbed GAFA (which stands for ‘Google, Apple, Facebook and Amazon’).

France is the world's top wine exporter in terms of revenue and the US is the world's largest consumer of wine and the largest import market.

France and the EU have already warned that they are ready to retaliate in turn if Trump’s administration carries out the threat.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” said Finance Minister Bruno Le Maire on Sunday, in an interview with France 3 television.

Le Maire further revealed that Paris was ready to discuss a global digital tax with Washington at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” he added.

Le Maire also noted that the new EU Commissioner for Economy, Paolo Gentiloni, had already proposed restarting  such talks.

Washington claims that the new law is “inconsistent with prevailing principles of international tax policy.”

This is while the US administration of President Donald Trump has itself initiated aggressive trade wars, including on the EU as well as China, among other countries.

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