Trump Says U.S. to Take Action Against France for Tax on American Tech Companies
By Vivian Salama and Josh Zumbrun
WASHINGTON -- President Trump promised to take "substantial
reciprocal action" against France after the nation's President
Emmanuel Macron this week signed into law a tax on American tech
giants like Alphabet Inc.'s Google and Amazon.com Inc.
"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!"
Despite Mr. Trump's mention of French wine, it couldn't be
immediately determined what the reciprocal action would target.
In 2018, French imports to the U.S. totaled $52 billion, of
which about $5 billion is alcoholic beverages, according to
Commerce Department data.
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
On July 10, U.S. Trade Representative Robert Lighthizer
initiated an investigation against France, under the same broad law
on which the Trump administration relied for its trade conflict
with China, claiming the measure discriminates against American
Under the law governing this process, Section 301 of the Trade
Act of 1974, the USTR would have the ability to impose tariffs on
anything and everything imported to the U.S. from France.
The legal process to impose the tariffs would take at least
another month. The U.S. will hold a public hearing on Aug. 19 on
any proposed action, with the public allowed to submit comments on
the proposal through Aug. 26. After this comment period is
complete, the U.S. could impose tariffs.
France has dismissed the U.S. trade threat, asserting that it is
a sovereign state that makes sovereign decisions on tax
The French measure applies 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
Following the president's tweet, the White House released a more
"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
"The Trump administration has consistently stated that it will
not sit idly by and tolerate discrimination against U.S.-based
firms," Mr. Deere added, referring to Mr. Lighthizer's
A spokeswoman for Mr. Macron declined to comment on Friday.
"Universal taxation of digital activities is a challenge that
concerns everyone. We wish to reach an agreement on this topic as
part of the G-7" and the Organization for Economic Cooperation and
Development, French Economy and Finance Minister Bruno Le Maire
said on Friday. "In the meantime, France will implement its
national decisions," he added.
France, the U.S. and other countries are engaged in a complex,
delicate negotiation over how to rethink corporate taxation in an
increasingly digital age. Countries are trying to decide how to
divide up taxing rights when companies have so much flexibility
over where to book their profits.
The countries are trying to avoid unilateral measures like the
French tax and a similar U.K. proposal, and France has said it
would remove the tax when the countries reach a multilateral
The U.S. wants new rules that are focused on the digital
economy, not tech companies, while European countries emphasize the
importance of getting tax revenue from companies making substantial
profits in their markets.
and Noemie Bisserbe contributed to this article.
Write to Vivian Salama at email@example.com and Josh Zumbrun
(END) Dow Jones Newswires
July 26, 2019 15:07 ET (19:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.