U.S. Prepares to Levy Tariffs on French Cosmetics, Handbags
By Josh Zumbrun
WASHINGTON -- The Trump administration said it would put tariffs
on $1.3 billion of French imports if Paris doesn't back down from
plans to impose a new digital-services tax that would fall heavily
on U.S. technology companies.
The Office of the U.S. Trade Representative said the proposed
tariffs on certain cosmetics and handbags wouldn't take effect
until Jan. 6, 2021, which gives time for both sides to negotiate a
The USTR said in a filing Friday that the tariffs would be set
at a rate of 25%. The administration had previously considered a
wider range of goods for the tariffs, including wines and cheeses,
that were left off the final list announced Friday. The
administration had also said the tariffs could be as high as
The tariffs are being imposed after a USTR investigation
concluded that France's digital services tax was designed to
discriminate against U.S. digital companies. French legislators had
called the proposal a "GAFA tax" because it would fall heavily on
Google, Apple, Facebook and Amazon.
France passed the tax last year, but agreed to suspend
collection at least until later this year while countries are
working on an international agreement that would standardize how to
tax internet-based commerce.
Lawmakers and tech companies have supported the administration's
efforts to get France and others to dial back the digital tax
"Retaliatory tariffs aren't ideal but the French government's
refusal to back down from its unilateral imposition of unfair and
punitive taxes on U.S. companies leaves our government with no
choice," said a statement from Sens. Chuck Grassley (R., Iowa) and
Ron Wyden (D., Ore.), the chairman and ranking member respectively
of the Senate committee with oversight of taxation.
The French embassy didn't immediately return a request for
comment Friday night.
France has said it also favored an international framework for
digital taxes, but was prepared to move forward with the tax if no
agreement were reached. French officials have said the threat of
tariffs was unjustified and that the U.S. was the party preventing
an international consensus from being reached on the issue.
Countries have been negotiating an international standard for
taxing digital services via talks at the Organization for Economic
Cooperation and Development, a group of 37 advanced economies. The
French finance minister said in June that the talks were "within a
few centimeters of an accord" but U.S. Treasury Secretary Steven
Mnuchin said they were at an impasse.
The action is part of a widening fight between the U.S. and
countries proposing digital-services taxes. Because the most
successful global technology companies are the American tech
giants, many of the proposals heavily affect American
Last month, the USTR also formally initiated a process that
could lead to tariffs against imports from a number of countries
that are considering digital- services taxes of their own. The USTR
opened investigations against such measures from the European
Union, as well as national proposals from Austria, Brazil, the
Czech Republic, India, Indonesia, Italy, Spain, Turkey and the
Write to Josh Zumbrun at Josh.Zumbrun@wsj.com
(END) Dow Jones Newswires
July 10, 2020 19:01 ET (23:01 GMT)
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