Trump Says U.S. to Take Action Against France for Tax on American Tech Companies
July 26 2019 - 1:46PM
Dow Jones News
By Vivian Salama
WASHINGTON -- President Trump promised to take "substantial
reciprocal action" against France after its legislature approved a
new tax on large American tech companies like Alphabet Inc.'s
Google and Amazon.com Inc. over U.S. objections.
"France just put a digital tax on our great American technology
companies," Mr. Trump said on Twitter on Friday. "If anybody taxes
them, it should be their home Country, the USA. We will announce a
substantial reciprocal action on Macron's foolishness shortly. I've
always said American wine is better than French wine!"
Mr. Trump made a reference to French wine in his tweets, but it
couldn't be immediately determined what the reciprocal action would
target.
Earlier this month, France's legislature gave final approval to
a new tax on large tech companies, making it the first in a series
of proposed national taxes on digital services being debated across
Europe.
Ahead of the vote, U.S. Trade Representative Robert Lighthizer
said his office would investigate the tax under the same broad law
on which the Trump administration relied for its trade conflict
with China, claiming the measure discriminates against American
firms.
France dismissed the threat, asserting that it is a sovereign
state that makes sovereign decisions on tax matters.
The French proposal will apply a 3% tax on revenue that
companies like Google or Amazon reap in France from such activities
as undertaking targeted advertising or running a digital
marketplace.
Following the president's tweet, the White House released a more
detailed response.
"The United States is extremely disappointed by France's
decision to adopt a digital services tax at the expense of U.S.
companies and workers," said spokesman Judd Deere. "France's
unilateral measure appears to target innovative U.S. technology
firms that provide services in distinct sectors of the
economy."
"The Trump administration has consistently stated that it will
not sit idly by and tolerate discrimination against U.S.-based
firms," Mr. Deere added. "The U.S. Trade Representative has already
launched a Section 301 investigation into France's digital-services
tax, and the administration is looking closely at all other policy
tools."
Write to Vivian Salama at vivian.salama@wsj.com
(END) Dow Jones Newswires
July 26, 2019 13:31 ET (17:31 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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