Primed to retaliate with European Union over USA tariff threat against Paris

Daniel Fowler
December 3, 2019

The US is threatening to impose $2.4bn (£1.85bn) worth of tariffs on French exports after a top US trade official said that France's new digital services tax unfairly targets American tech companies.

Speaking in London on Tuesday morning ahead of a North Atlantic Treaty Organisation 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.

"In case of new American sanctions, the European Union would be ready to retaliate", Le Maire told Radio Classique.

He later told a press conference: "We are not targeting any country". "The USTR is focused on countering the growing protectionism of European Union member states, which unfairly targets US companies, whether through digital services taxes or other efforts that target leading US digital services companies".

The Monday release also included a reactive notice which threatened to target a number of French goods for tariffs, including handbags, porcelain, beauty products, cheeses, sparkling wine, soap and more items.

It would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than €750m ($830m) and French revenue exceeding €25m ($27.7m).

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"The United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on USA companies", Ambassador Robert Lighthizer said Monday.

Hermes was around 1.9 percent lower, while LVMH and Kering fell by 1.3 percent and 1.2 percent respectively.

The USTR is accepting public comment until January 6, 2020, with a public hearing to be held on January 7.

The United States has already imposed 25pc duties on French wine and cheese as part of its WTO-sanctioned response to illegal European Union aircraft subsidies, a move exporters warned would penalise U.S. consumers while severely hurting French producers.

However, the US Chamber of Commerce warned that the new set of tariffs "may elicit additional rounds of retaliatory measures that represent a substantial risk to US economic growth and job creation".

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