The European Commission plans to settle the latest trade dispute with the US over the French digital tax “amicably” but warned that the European Union will “react as one” if Trump’s administration imposes tariffs on Paris. Brussels will seek “immediate discussions to solve this issue amicably” to prevent a dispute at the World Trade Organization, or WTO, a Commission spokesperson said on Tuesday (3 December). Should the talks fail to reach a settlement over the dispute, the two largest trading partners will have to address their differences over the French levy at the WTO.
The comments came after a US investigation found that the digital tax “discriminates against US companies” like Google, Apple, Facebook and Amazon, which prompted the US Administration to threaten France with 100% tariffs on exports, including luxury goods and wine, worth $2.4 billion. The EU should submit its comments by 6 January 2020, and a hearing on this case will take place the following day in the US Congress. It is estimated that, apart from the US tech giants, in total around 30 companies have been affected, including some European and Chinese firms.
Earlier in July, France adopted a 3% tax that applies to firms with global revenues over €750 million annually, generated from digital activities, of which at least €25 million are made in its territory. French tax is “not against any country or company,” said French finance minister Bruno Le Maire, speaking to reporters in Paris. He also explained that the basis of the law is “fair taxation” of digital activities across the world, whereby France is willing to withdraw its tax as soon as there is an agreement on the OECD proposal for a digital tax at a global level.
