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US imposes retaliatory 25 percent tariffs on French goods

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)
US President Donald Trump, with US Secretary of the Treasury Steven Mnuchin, speaks to the press in the Brady Briefing Room of the White House in Washington, DC, on July 2, 2020. (AFP photo)

The United States has decided to impose additional tariffs on some French goods in response to France's tax on US digital companies, escalating an international trade war that threatens to further damage the global economy.

The Trump administration said on Friday it would impose a new 25 percent tariff on more than a billion dollars worth of French goods, including cosmetics, soap and handbags.

It said the administration's move was in retaliation to France's tax on American technology companies.

The French government imposed a 3 percent tax on the revenues some US companies earn from providing goods and services to French users over the internet.

US companies paying France's tax include Facebook, Google, Amazon and others whose businesses focus on digital advertising and e-commerce.

The tax issue was addressed in January, with the French side pledging to suspend collection of the tax and Americans pledging to hold off on tariffs, while international negotiators sought a multilateral trade agreement on how to tax internet commerce that crosses borders.

However, US Treasury Secretary Steven Mnuchin suspended the international negotiations, warning the other side that retaliatory measures would be slapped on any country that imposed new taxes on American technology companies like Amazon, Facebook and Google.

After France, several other European countries -- including the UK, Italy, Spain and Austria -- have all announced plans to impose similar digital services taxes on US internet firms, regardless of whether the companies have a physical presence in the country or not.

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