France, US seek to avert trade war in digital tax row
France and the United States on Tuesday said they would seek to ward off a trade war after Washington threatened tariffs on French products ranging from sparkling wine to handbags and Paris warned of retaliation backed by the entire EU.
The French parliament infuriated the administration of President Donald Trump in July by adopting a law taxing digital firms like Google, Apple, Facebook and Amazon for revenues earned inside the country.
Talks to resolve the issue have so far failed, and on Monday Washington threatened to impose tariffs of up to 100 percent on $2.4 billion in French goods including champagne, cosmetics, yoghurt and Roquefort cheese.
“We were in contact yesterday with the European Union to ensure that if there are new American tariffs there will be a European response, a strong response,” French Finance Minister Bruno Le Maire told Radio Classique.
The EU backed up his comments, with commission spokesman Daniel Rosario saying that “as in all other trade-related matters the EU will act and react as one and it will remain united.” The full list of French products subject to potential duties includes cosmetics, porcelain, soap, handbags, kitchen equipment, butter and several kinds of cheeses, including Roquefort, Edam and Gruyere.
But despite Trump’s repeated threats to retaliate against French wines, only sparkling wine like Champagne made the tariff list.
The measures could be imposed after January 14, the last date set by the US authorities for comments on the action.
But speaking at talks with Macron at the NATO summit in Britain, Trump said that the US had a “lot of trade” with France and that the dispute was “minor”.
“I think we’ll probably be able to work it out, but we have a big trade relationship and I’m sure that within a short period of time things will be looking very rosy,” he said.
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