France and the European Union are “ready to retaliate” if the US follows through with threats to slap tariffs on $2.4 billion in imports of champagne, handbags and other French products.
French Finance Minister Bruno Le Maire on Tuesday called the threat — announced Monday following a probe that found France’s new digital service tax would hurt US technology companies — “simply unacceptable.”
“In case of new American sanctions, the European Union would be ready to retaliate,” Le Maire told Radio Classique.
He also said France’s new tech tax is aimed at “establishing tax justice.”
“If [the world] wants solid tax revenue in the 21st century, we have to be able to tax the digital economy,” he said. “This French taxation is not directed at any country, or against any company.”
The investigation by the US Trade Representative’s office found the French tax was “inconsistent with prevailing principles of international tax policy and is unusually burdensome for affected US companies,” including Alphabet Inc’s Google, Facebook Inc, Apple Inc and Amazon.com Inc.
“I’m not in love with those companies but they’re our companies,” Trump said Tuesday in London, where he’s attending the NATO summit.
France’s 3% levy applies to revenue from digital services earned by companies with more than $27 million of revenues from France and $830 million worldwide.
Le Maire said France will reimburse the tax if the US agrees to the international tax plan.
The proposed US tariffs could double the price American consumers pay for French products — and would come on top of a 25% tax on French wine imposed last month.