US threatened to impose goods from France 100% duty: what could rise in price

On Monday, December 2, the US government said it could impose fines of up to 100% on imports from France of champagne, bags, cosmetics, cheese and other goods worth $ 2,4 billion after it came to the conclusion that the new tax France's digital services will hurt US technology companies.

Фото: Depositphotos

The US trade mission said its investigation revealed that the French tax is "incompatible with the prevailing principles of international tax policy and is unusually burdensome for the affected US companies," including Google Alphabet, Facebook, Apple and Amazon.com, writes CNBC.

U.S. sales representative Robert Lightheiser said the government is considering whether to initiate such investigations regarding taxes on digital services in Austria, Italy, and Turkey. The US trade agency said it would collect public comments on the proposed list of fees, as well as the possibility of imposing fees or restrictions on French services, before the January 14, and a public hearing was scheduled for January 7.

The date of entry into force of the proposed 100% duties has not yet been indicated.

On the subject: Which US residents pay the most local taxes?

Champagne, cheese and cosmetics

The list of tariffs targets some items that were exempt from the 25% tariffs imposed by the United States over disputed subsidies for European Union aircraft, including sparkling wines, handbags and makeup products - products that will negatively impact the French items giant's profits luxury LVMH and cosmetics manufacturer L'Oreal.

The French Gruyère cheese, produced in Savoy and Franche Comté, also did not suffer from duties introduced in October, but was included in the list of French products for the new 100% duties, along with many other cheeses.

The findings have been supported by US lawmakers and US industry groups, who have long argued that the tax is unfairly targeted at US technology firms.

“The French digital services tax is unreasonable, protectionist and discriminatory,” Senators Charles Grassley and Ron Wyden, the ranking Republican and Democrat respectively, said in a joint statement on the Senate Finance Committee.

On the subject: US imposes record duties on $ 7,5 billion for European imports: how prices will change

French officials said France would challenge the agency’s findings, echoing Paris’s claim that the digital tax is not specifically targeted at US technology companies.

“We will not give up taxing digital firms,” the official said.

The fee of 3% applies to digital services revenue received by firms with more than 25 million euros (27,86 million dollars) in France and 750 million euros (830 million dollars) worldwide.

The report and the proposed list of fees follow months of negotiations between French Treasury Secretary Bruno Le Mer and US Treasury Department Stephen Mnuchin over a global revision of digital tax rules. They reached a compromise in August at the G7 summit in France, according to which the losses of American firms could be compensated.

But Trump never officially endorsed the deal and declined to state whether the threat of new fees has been removed from the agenda.

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