U.S., France reach truce on tech taxes

French President Emmanuel Macron and U.S. President Donald Trump have agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year, a French diplomat said.

The dispute started when France pushed to tax tech companies around the world, including U.S. internet giants Google, Apple Inc. and Amazon.com Inc. The U.S. objected, alleging on Dec. 2 that the French tax discriminates against American technology companies, citing a U.S. law that Trump had also used to justify tariffs against China. That opened the door to the U.S.’s threat to hit $2.4 billion of French goods with tariffs in retaliation.

France and the U.S. will continue negotiations along with their European partners until the end of 2020 to agree on a global framework that ensures tech companies pay an appropriate amount of tax, the French diplomat said, asking not to be identified in line with French government rules.

The White House and the U.S. trade representative’s office didn’t immediately respond to requests for comment, though Trump on Sunday reiterated his frustration with Europe as a trading partner. The Trump administration in 2018 invoked national-security considerations to impose tariffs on steel and aluminum from Europe, prompting the EU to retaliate with levies on iconic American brands such as Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.

“Europe has had tremendous barriers to us doing business with them. All those barriers are coming down. They have to come down,” Trump told a conference of farmers in Austin, Texas. “If they don’t come down, we’re going to have to do things that are very bad for them.”