DONALD Trump has threatened to start a trade war with France after ordering a probe into Emmanuel Macron’s tax raid on US tech firms.
Announced yesterday, the investigation could lead to the US President imposing new tariffs or other restrictions on the French.
France today voted in favour of the so-called “digital tax” which will impose a three per cent levy on the revenue of large internet companies – potentially yielding £449m a year.
The tax will affect firms with at least £674m in annual revenues meaning US giants such as Google, Apple and Amazon will be hit hard.
Launching the probe, US Trade Representative (USTR) Robert Lighthizer said: “The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.”
The move gives Lighthizer up to a year to probe if France’s digital-tax plan would hurt US tech companies.
It will determine if the levy poses an unfair trade practice.
TRUMP TRADE WAR
Prior investigations have covered Chinese trade practices and European Union subsidies on large commercial aircraft.
USTR said in a statement the “services covered are ones where U.S. firms are global leaders.”
It added: “The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain US-based technology companies.”
Lighthizer said Trump “has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”
In April, Trump threatened to expand his trade war with the EU by slapping tariffs on CHEESE.
President Macron plans to impose a tax on large tech companies – sparking a probe by the Trump administration[/caption]
The President’s shock $11bn (£8.5bn) move is said to be in retaliation for huge subsidies supporting European aerospace giant Airbus.
The US Trade Representative released a wide-ranging list of goods, including aircraft, cheese and wine, that could be targeted by the White House.
It added that “the time has come for action” unveiling a 14-page tariffs hit list targeting EU products also including butter, fish, jam, olive oil and suits.
The US has complained that the EU unfairly helps Airbus at the expense of American rival Boeing in a long-running spat and warned that the tariffs will be imposed this summer.
After the US released the list, non-drinker Trump to Twitter to make the case.
“The EU has taken advantage of the US on trade for many years. It will soon stop!, ” he tweeted.
The measures will mark the first major escalation in trade tensions between the US and EU since a tit-for-tat tariffs exchange last year.
The Trump administration put taxes on European steel and aluminium imports while the EU responded by hitting iconic American goods, targeting Harley-Davidson motorcycles, bourbon and Levi’s jeans.
The latest escalation in trade tensions could be a precursor to US tariffs targeting Europe’s embattled car industry.
The import duties would be imposed if the World Trade Organisation rules in favour of the US this summer in a case over subsidies that the Europeans gave plane maker Airbus.
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The Trump administration argues that the ruling would give it the legal right to make up for losses US manufacturer Boeing incurred.
But economists say the Trump team appears to want to use the ruling not merely to help Boeing but to heighten pressure on trading partners like Germany with which the US has a trade deficit.
In the end, more tariffs could further raise consumer prices in the US and weigh on the global economy at a time when it’s showing alarming signs of stress as Trump wages a broader trade war with China.
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