US threatens tax on champagne and French cheese


The Trump administration is threatening to slap import taxes on $2.4bn worth of French goods, including cheese, champagne, make-up and handbags. The planned tariffs come in response to a new French digital services tax that would affect companies including Google, Amazon and Facebook.

France, along with several other European countries, wants to limit the tech giants’ ability to avoid taxes. But trade officials in Washington say US firms are being unfairly targeted. French minister Bruno Le Maire called the US threat to impose tariffs in response to the tax “unacceptable” and suggested France would be prepared to retaliate.

France has long been concerned that US technology giants are avoiding taxes in the European Union. France says taxes should be based on where the digital activity – browsing the page – takes place, not where firms have their headquarters.

It is not the only country to raise concerns and a group of nations are drawing up new multilateral rules via the OECD. But France does not want to wait for that to bear fruit, so this summer drew up its own tax.

It is imposing a 3% tax on any digital company with revenue of more than €750m ($850m; £670m), of which at least €25m is generated in France. The tax will be back-dated to early 2019, and is expected to raise about €400m this year.

About 30 companies are expected to pay it, mostly US firms such as Alphabet, Apple, Facebook, Amazon and Microsoft. Amazon has already responded by raising fees for French businesses by 3%.(BBC)…[+]