US slaps French goods with 25pc duties in digital tax row
The Trump administration on Friday announced additional duties of 25% on French cosmetics, handbags and other imports valued at $1.3 billion in response to France's digital services tax, but would hold off on implementing the move for up to 180 days.
The U.S. Trade Representative's office said delaying the start of the tariffs would allow further time to resolve the issue, including through discussions in the Organisation for Economic Co-operation and Development (OECD). The decision also reflected France's agreement to defer collection of its 3% tax on digital services.
The U.S. move follows a U.S. Section 301 probe, which concluded the French tax discriminates against U.S. tech firms such as Google (GOOG.O), Facebook (FB.O) and Apple Inc (AAPL.O).
France and other countries view digital service taxes as a way to raise revenue from the local operations of big tech companies which they say profit enormously from local markets while making only limited contributions public coffers.
U.S. Trade Representative Robert Lighthizer first disclosed on Thursday plans to impose new tariffs on French goods with deferred implementation. The $1.3 billion worth of goods is part of a list first published by USTR in December.
The United States has initiated similar Section 301 investigations of digital services taxes adopted or being considered by 10 other countries, including Britain, India and Turkey, which could result in tariffs against their goods. OECD talks aimed at developing a multilateral solution for taxing digital services have failed to produce any results, with negotiations complicated by the coronavirus pandemic.
Last month, U.S. Treasury Secretary Steven Mnuchin caught European countries by surprise when he suggested a pause in the OECD talks given the lack of progress there.
A spokesman the European Union told Reuters earlier that Brussels could propose its own solution if the OECD talks failed to produce an agreement. He urged Washington to resume the talks.
for
to
Meanwhile, This month, Florida has repeatedly reported more new daily coronavirus cases than any European country had at the height of their outbreaks. Florida Governor Ron DeSantis, a Republican, angered some residents and medical experts by calling the spike a "blip".
On Friday, DeSantis said that the state would receive more than 17,000 vials of the antiviral drug remdesivir from the U.S. government, adding: "That'll be something that will hopefully help to improve patient outcomes."
Scott Burkee, a 43-yearold former Disney employee from Davenport, Florida, said DeSantis "has shown zero effort to control the spread, he only becomes concerned when Trump does. The virus is clearly out of control."
Trump, a Republican, traveled to Florida on Friday for an event at the U.S. military's Southern Command and a campaign fundraiser. The president has sparred with state and local officials and teachers unions over the reopening of schools and said on Friday the Treasury Department would re-examine the tax-exempt status and funding of those that remain closed.