France has announced it will retaliate against any action taken by the United States against its digital services tax. The announcement by France’s economy minister, Bruno Le Maire, comes as a bit of a surprise because the two sides seemed to have come to an agreement over the issue back in August during the G7 event.
New comments from Le Maire suggest that France is now expecting a bit of trouble from the U.S. over the digital services tax plans, he said:
“If the Americans decide to go ahead and impose sanctions against the digital tax ... in this case, we would retaliate. If there were to be sanctions, and it is a possibility that we will take sanctions, we would immediately contact the WTO (World Trade Organization).”
In order to come out in front of any problems, Le Maire has decided to tackle the issue before the U.S. has time to retaliate. He has sent a letter to the U.S. negotiator and is also planning to discuss the matter by phone with U.S. Treasury Secretary Steven Mnuchin.
Back in December, it was reported that the Trump administration was considering duties of up to 100% on $2.4 billion worth of imports from France because of the planned digital services tax. The impacted products would include champagne, handbags, cheese, and more. According to U.S. Trade Representative Robert Lighthizer, similar moves could be taken against Austria, Italy, and Turkey, all of which are planning their own digital tax.