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French finance chief: EU would 'hit back' against U.S. tariffs

By
Darryl Coote & Don Jacobson
French Economy and Finance Minister Bruno Le Maire, pictured here in September, said Tuesday the European Union would hit back against U.S. tariffs imposed in retaliation for the new French digital services tax. File photo by Ian Langsdon/EPA-EFE
French Economy and Finance Minister Bruno Le Maire, pictured here in September, said Tuesday the European Union would "hit back" against U.S. tariffs imposed in retaliation for the new French digital services tax. File photo by Ian Langsdon/EPA-EFE

Dec. 3 (UPI) -- The European Union stands prepared to "hit back hard" against any new U.S. tariffs aimed at French exports, the country's economy and finance minister said Tuesday.

Bruno Le Maire, speaking to a French broadcaster, said he's convinced the EU will not sit idly by if the Trump administration imposes retaliatory tariffs of up to 100 percent on $2.4 billion in French exports. The proposed taxes are a response to a new French law the administration says unfairly targets American tech companies.

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"If there are any new American sanctions, the European Union will be ready to hit back," Le Maire said. "[Monday] we made contact with the European Commission for assurances that should there be any new sanctions, there would be a European response, a strong response."

The French official also posted Twitter comments in which he called the proposed U.S. tariffs "simply unacceptable."

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"French taxation on the digital giants aims to restore fiscal justice," he said. "It does not only target U.S. companies but also Chinese or European companies."

Despite U.S. opposition, French President Emmanuel Macron signed legislation in July to apply the nation's new Digital Services Tax, a 3 percent tax retroactively applied on gross revenue of large companies intended to modernize its tax system.

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The office of the U.S. Trade Representative said Monday the law discriminates against U.S. companies, including Google, Apple, Facebook and Amazon.

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U.S. President Donald Trump, meeting with NATO Secretary General Jens Stoltenberg in London Tuesday, told reporters, "France is not doing well economically at all. They're starting to tax other people's products, so therefore, we're going to tax them."

U.S. Trade Representative Robert Lighthizer said the law is inconsistent with prevailing tax principles, as it was retroactively applied, imposed against revenue rather than income and its purpose is to penalize U.S. tech giants.

"[Our] decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies," Lighthizer said in a statement.

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Lighthizer's office issued a Federal Register Notice proposing the tariffs for French products like wine, makeup and handbags.

Jordan Haas, director of trade policy for the Internet Association, said the USTR is defending the Internet.

"Discriminatory digital services taxes act as a trade barrier for innovative American companies and small businesses often face the biggest burden by them," he said in a statement.

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The move was also celebrated by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., who called the French digital tax "unreasonable, protectionist and discriminatory."

"Taking premature action that will adversely and disproportionately affect another [Organization for Economic Co-operation and Development] member state is contrary to the organization's goals and shouldn't stand," they said in reference to the wealthy nations' organization both countries are members of. "We welcome this step from USTR on behalf of U.S. companies being unfairly targeted and harmed by the French tax."

Lighthizer added that he's considering similar investigations against other nations, such as Austria, Italy and Turkey.

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