0228 GMT January 27, 2020
“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,” French Finance Minister Bruno Le Maire said on France 3 television, Reuters reported.
The French government said on Tuesday that his country and the European Union are ready to retaliate if US President Donald Trump acts on a threat to impose duties of up to 100% on $2.4 billion in imports of handbags and other French products.
The threat of punitive tariffs came after a US government investigation found France’s new digital services tax would harm US technology companies, and will intensify a festering trade dispute between Europe and the United States.
Speaking in London on Tuesday morning ahead of a NATO alliance summit, Trump said he would not allow France to take advantage of American companies and that the European Union treated the United States very unfairly on trade.
Le Maire branded the US threat unacceptable and said the French tax did not discriminate against American companies.
He later told a press conference: “We are not targeting any country.”
France’s 3% levy applies to revenue from digital services earned by companies with more than 25 million euros ($27.86 million) of revenues from France and 750 million euros ($830 million) worldwide.
An investigation by the US trade representative’s office found the French tax was “inconsistent with prevailing principles of international tax policy.”
French products will not face tariffs immediately as the US Trade Representative still intends to gather public comments and hold a public hearing in January.
Based on past experience of Section 301 tariffs, primarily applied to Chinese goods, France would face punitive tariffs in two to three months.
Any retaliatory action from France would have to be taken at an EU-wide level because the 28-nation bloc is a customs union, which applies duties at its border. The tariff spat marked a new low in relations between French President Emmanuel Macron and Trump.