The Trump Administration vows 100 percent tariffs on $2.4 billion of French products over...

nanoguy

TS Addict
Staff member

The Trump Administration wants to impose a 100 percent tax on imports of French goods, including some that were spared from the 25 percent tariffs imposed over disputed EU aircraft subsidies. The move would affect around $2.4 billion worth of goods like wine, champagne, luxury handbags, and cosmetics.

According to a report from the Office of the US Trade Representative, officials allege that France's Digital Services Tax "discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies."

The USTR mentions Google, Amazon, Facebook and Apple as prime examples of American tech companies that will have to deal with the retroactive nature of France's new tax legislation that will come into effect on January 1 2020 and targets multinationals that generate €750 million ($831 million) in gross revenue globally and €25 million ($27.7 million) in the country.

US officials reportedly asked France to refrain from adopting the new legislation and called for an open discussion on the matter. One of the main issues they saw with the final bill that was signed on July 24 was that the Digital Services Tax would apply a 3 percent levy on gross revenue from providing “digital interface” services and “targeted advertising” services, as calculated through a specific formula that involves French turnover and worldwide turnover of the affected companies.

These terms best describe Google, Apple, Facebook, and Amazon, which were collectively referred to as "GAFA" by French finance minister Bruno Le Maire, as well as members of the French parliament. The official announcement of DST also describes it as the "GAFA Tax" and explains that its purpose is mainly to "catch contributions of companies who get a significant part of their value from the participation of French located web users."

Senators Charles Grassley (Republican) and Ron Wyden (Democrat) said in a joint statement that the French DST is "unreasonable, protectionist, and discriminatory." However, French officials seem hell-bent on taxing big tech companies, at least until new rules will be set by the OECD that would prevent them from using low-tax locations to optimise worldwide profits.

The US trade agency says it will be seeking public comments through mid-January on the newly-proposed 100 percent tariff on French goods. There's no indication for when these new levies will come into effect, but the USTR report mentions plans to introduce similar measures against digital services taxes adopted in Austria, Turkey, and Italy.

US trade representative Robert Lighthizer noted the decision "sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies."

French finance minister Bruno Le Maire said in a statement the new US tariff is "unacceptable" and could be met with a "strong response" from the EU. During an interview with Radio Classique, he explained "this is not the sort of behavior we expect from the United States toward one of its main allies, France, and toward Europe in general."

On a more positive note, OECD negotiations to reach a common ground on how to tax multinational corporations are said to be going well. The organization is seeking approval from the G20 countries by the end of January 2020, so that it can finalize the new rules before more countries decide to craft their own stop-gap measures.

Permalink to story.

 

psycros

TS Evangelist
Eventually America's partners (and rivals) will figure out that Trump always negotiates by starting wildly high so he has more bargaining room. But by then he'll probably be out of office and whoever follows him will likely undo most of the progress he's making on trade. The rest of the ruling class in DC only cares about maximizing the stock prices of all the companies whose boards they sit on. Few things illustrate the hypocrisy and double standards of the elites better than the fact that this is legal.
 

CBTex

TS Booster
I supposed it's too much to hope for, to get this a**hole impeached, and move on with our lives and our place in the world community?

Doesn't matter anyways. Some other jerk will take over. Doesn't matter what letter is after their names, all the politicians only care about the number digits in their bank accounts.
 

captaincranky

TechSpot Addict
Doesn't matter anyways. Some other jerk will take over. Doesn't matter what letter is after their names, all the politicians only care about the number digits in their bank accounts.
Trump is a pathological liar, as well as being egomanical to the point of psychosis.

He most prominently suffers from the delusion that by raising trade tariffs to absurd levels, that our manufacturing infrastructure will somehow magically reappear.
 

jbc029

TS Booster
Trump is a pathological liar, as well as being egomanical to the point of psychosis.

He most prominently suffers from the delusion that by raising trade tariffs to absurd levels, that our manufacturing infrastructure will somehow magically reappear.
Tariffs aren't necessarily about local sourcing. It's about changing sourcing of materials/services. It's just usually easier to make it locally than try to find another international source.

Either way, it's not setting the best precedent that other countries should start assuming the US is going to **** the bed right out of the gate when something "not good" for our companies happens elsewhere.
 
  • Like
Reactions: TempleOrion

MilwaukeeMike

TS Evangelist

Doesn't matter anyways. Some other jerk will take over. Doesn't matter what letter is after their names, all the politicians only care about the number digits in their bank accounts.
You must not have read the story. Trump is protecting the bank accounts of Google, Apple, Facebook and Amazon. All of whom donate almost exclusively to his opponents.

This isn't political. This sounds like France just deciding they want money from American tech companies. France wants 3% of GROSS revenue that companies make there?! that's probably a few million dollars. And if no one stops it what's next? Spain, Greece and Italy stick their hands out too and pass some new 'tax' laws? there's no end to it!

One of Trump's campaign favorites was talking about stopping China from stealing our intellectual property, making knock-offs, and selling them back to us. He's not going to sit around and do nothing - even if the tech industry hates him. I'm sure the tech companies are glad he's doing this - even though you'd never catch them saying as much.

A 100 percent tariff obviously isn't realistic. It's Trump's way of saying 'what you're doing is complete bulls***.' by countering the 3% tax with a 100% tariff it puts them in the same light. Sorta like saying a 3% tax on tech revenue is a stupid as a 100% tariff.

 

captaincranky

TechSpot Addict
Tariffs aren't necessarily about local sourcing. It's about changing sourcing of materials/services. It's just usually easier to make it locally than try to find another international source....[ ]...
A assume you'll get back to when an 8nm fab is built in this country. (For the convenience and cost savings of "doing it locally", of course).
 

captaincranky

TechSpot Addict
You must not have read the story. Trump is protecting the bank accounts of Google, Apple, Facebook and Amazon. All of whom donate almost exclusively to his opponents. ...[ ]...
In the meantime I'm thinking he's secretly hoping they'll join Mar Lago, at a quarter million a pop.

I've seen that Ireland is a tax shelter for Apple. If that's the case, he should tag them an additional 3% tax for doing business here.
 
  • Like
Reactions: TempleOrion

Maxiking

TS Booster
You must not have read the story. Trump is protecting the bank accounts of Google, Apple, Facebook and Amazon. All of whom donate almost exclusively to his opponents.

This isn't political. This sounds like France just deciding they want money from American tech companies. France wants 3% of GROSS revenue that companies make there?! that's probably a few million dollars. And if no one stops it what's next? Spain, Greece and Italy stick their hands out too and pass some new 'tax' laws? there's no end to it!

One of Trump's campaign favorites was talking about stopping China from stealing our intellectual property, making knock-offs, and selling them back to us. He's not going to sit around and do nothing - even if the tech industry hates him. I'm sure the tech companies are glad he's doing this - even though you'd never catch them saying as much.

A 100 percent tariff obviously isn't realistic. It's Trump's way of saying 'what you're doing is complete bulls***.' by countering the 3% tax with a 100% tariff it puts them in the same light. Sorta like saying a 3% tax on tech revenue is a stupid as a 100% tariff.
Tell Amazon, Google, Apple etc to pay taxes there? How is it fair? Any local company has no chance against them. They do not pay taxes and if you actually come with an idea which would be able to challenge them, they simply buy that company to erase the competition. Justice served. They only aim to create a monopoly.
 
  • Like
Reactions: TempleOrion

jpuroila

TS Booster
You must not have read the story. Trump is protecting the bank accounts of Google, Apple, Facebook and Amazon. All of whom donate almost exclusively to his opponents.

This isn't political. This sounds like France just deciding they want money from American tech companies. France wants 3% of GROSS revenue that companies make there?! that's probably a few million dollars.
Yeah, it should be more like 30% to be fair. They do business in France and get profit from France, therefore they should be paying proportional taxes to France. It's pretty ridiculous that people are arguing otherwise.
 
  • Like
Reactions: TempleOrion

Cubi Dorf

TS Booster
france should stay with old approach of say they broke law and make big fine. it worked for decades. US government didn’t fight back that way. it was a lot more subtle way to get US dollars.
 

MilwaukeeMike

TS Evangelist
Yeah, it should be more like 30% to be fair. They do business in France and get profit from France, therefore they should be paying proportional taxes to France. It's pretty ridiculous that people are arguing otherwise.
Yes, but French companies are not going to be paying this tax. That's why they're saying it's 'Disproportionately affecting American companies' It's even called the GAFA (Google, Apple, Facebook, Amazon) tax. They're making a tax that only affects American companies.

I understand that France wants a cut. Businesses in France are paying Google for ads that are shown to French users. That money is leaving France and the govt wants a piece. But many other countries are proposing the same thing, and they're working on it together. From the Wall Street Journal
Members of the Organization for Economic Cooperation and Development, including most of the world’s high-income nations, have been negotiating a new framework for taxes on digital services. France had pledged to repeal its new tax once an agreement is reached at the OECD, but progress has been slow.
France is trying to pass a law and get paid first. The law is retroactive to the beginning of 2019!! If this was legit they'd make it effective next year, not LAST year. They passed it on July 24 and make it effective almost 7 months prior to that! They must really be broke.

I am just astonished at the number of Americans that actually believe we "benefit" from those tariffs, yet Trump keeps claiming the same no matter how many authoritative experts point out he's wrong.
Tariffs help some and hurt others, but overall they're generally a bad idea for an established economy. Trump also thinks vaccines are dangerous - he's not a good authority on things you can learn from data. However, not mentioned in the story is that $2.4 Billion is slightly less than 5% of total French imports in 2018 (which were about $52 Billion), so maybe this isn't all that severe - and it probably won't even happen.
 

wiyosaya

TS Evangelist
Eventually America's partners (and rivals) will figure out that Trump always negotiates by starting wildly high so he has more bargaining room. But by then he'll probably be out of office and whoever follows him will likely undo most of the progress he's making on trade. The rest of the ruling class in DC only cares about maximizing the stock prices of all the companies whose boards they sit on. Few things illustrate the hypocrisy and double standards of the elites better than the fact that this is legal.
Progress in trade? 🤣🤣🤣🤣🤣🤣🤣🤣

Speaking as an employee in an industry that is highly and only negatively affected, world-wide BTW, by the "Progress in Trade", "progress in trade" is an oxymoron.
 
  • Like
Reactions: TempleOrion

wiyosaya

TS Evangelist
You must not have read the story. Trump is protecting the bank accounts of Google, Apple, Facebook and Amazon. All of whom donate almost exclusively to his opponents.

This isn't political. This sounds like France just deciding they want money from American tech companies. France wants 3% of GROSS revenue that companies make there?! that's probably a few million dollars. And if no one stops it what's next? Spain, Greece and Italy stick their hands out too and pass some new 'tax' laws? there's no end to it!

One of Trump's campaign favorites was talking about stopping China from stealing our intellectual property, making knock-offs, and selling them back to us. He's not going to sit around and do nothing - even if the tech industry hates him. I'm sure the tech companies are glad he's doing this - even though you'd never catch them saying as much.

A 100 percent tariff obviously isn't realistic. It's Trump's way of saying 'what you're doing is complete bulls***.' by countering the 3% tax with a 100% tariff it puts them in the same light. Sorta like saying a 3% tax on tech revenue is a stupid as a 100% tariff.
The thing is, though, GAFA have an army of tax lawyers that they employ to avoid paying any tax they can anywhere they operate. They all have more money than your favorite higher power and feign that they actually care about anything other than profits.
 

wiyosaya

TS Evangelist
This is the best way to ensure US will be ignored in future trading agreements. Years of openness which gave so much diversity and talents from whole world now are gone, interesting what this new isolationism and trade war with everyone bring to the future.
What seems to be somewhat worse, though its a chicken / egg sort of thing, IMO, is that it seems that there are some countries out there that seem to think the current US policies are a good thing and are implementing similar policies in their own countries.
 

Latest posts