Macron trade war: France promise ‘strong response’ to Trump’s ‘unacceptable’ tariff threat.

Donald Trump and Emmanuel Macron
President Donald Trump and Emmanuel Macron

M Le Maire told Radio Classique: “The threat of new sanctions against France is unacceptable. “This is not the sort of behaviour one expects from the United States with respect to one of its main allies, France, and to Europe in general.” He continued: “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.” France’s three percent “GAFA” tax applies to revenue from digital services earned by companies with more than 25 million euros in revenue from France and 750 million euros worldwide.

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M Le Maire urged the US later on Tuesday to “give a clear answer” and say whether it would fight the so-called GAFA tax.

French sparkling wines, handbags, cosmetics and several kinds of cheeses are on the list of goods that could be hit with tariffs of up to 100 percent as early as mid-January, after a report from the US Trade Representative’s office found that the tax would harm US tech behemoths such as Google, Apple, Facebook and Amazon.

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 US companies,” US Trade Representative Robert Lighthizer said in a statement.

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Mr Lighthizer added that the US would likely investigate similar taxes in other EU countries: “The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets US companies.”

The French tax imposes a three percent levy on revenues from digital services earned by companies with more than 25 million euros (£21 million) in revenue from France and £636 million (€750m) worldwide.

French President Emmanuel Macron says taxing tech giants more is a question of social justice, and has fought hard for a digital tax to cover EU member states.

In London for a Nato summit, M Macron and President Donald Trump played down the tax dispute, saying they hoped they could overcome their differences.

Mr Trump told reporters: “They’re American companies. They’re tech companies.

“They’re not my favourite people, but that’s okay, I don’t care, they’re American companies. And we want to tax American companies. It’s not for somebody else to tax them.

“So it’s either gonna work out, or we’ll work out some mutually beneficial tax,” he said in reference to the levy threat. “And the tax will be substantial. I’m not sure it’s gonna come to that, but it might.”

M Macron, for his part, said he believed he could “settle this situation with President Trump,” but stressed he remained “determined to defend the interests” of both France and Europe.

Washington has already imposed 25 percent tariffs on French wine and cheese as part of its WTO-backed response to EU aircraft subsidies.

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