US trade officials to make big announcement on France's digital tax
France's finance minister is pessimistic about the U.S. response
The U.S. Trade Representative (USTR) is set to announce any proposed response along with its report on France's digital services tax Monday.
French Finance Minister Bruno Le Maire seemed pessimistic about U.S. response to the tax, which affects U.S. companies, on Monday.
"Having demanded an international solution from the [Organization for Economic Co-operation and Development], it [Washington] now isn't sure it wants one," Le Maire told France Inter radio, according to AFP.
"We can see that the United States is shifting into reverse," La Maire said. He added that President Trump "is going to content himself with imposing sanctions against France over its national tax."
EU WILL 'RESPOND IN KIND' IF US IMPOSES TARIFFS ON FRANCE OVER DIGITAL TAX
In March, France introduced the 3 percent tax on companies with more than $834 million in revenue globally and more than $27 million in revenue in France made through certain digital services.
Some U.S. tech giants such as Google, Apple, Facebook and Amazon said the French tax, known as GAFA — an acronym representing all four companies — unfairly targets them.
The White House said that "France's unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy."
The purpose of the tax is to remove the loophole that allows million- and billion-dollar companies to avoid paying high taxes.
"Digital giants pay 14 percentage points less tax than European [small- and medium-sized enterprises]. The fact that these companies pay less tax than a cheese producer in Quercy is a real problem," France Economy Minister Bruno Le Maire said in an April 3 interview in the Le Parisien.
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The U.S. and Paris compromised on the tax in late August after Trump threatened to impose tariffs on French wine if the deal fell through.
U.S. Trade Representative Robert Lighthizer said the purpose of the investigation is to "determine whether [the tax] is discriminatory or unreasonable and burdens or restricts United States commerce."
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FOX Business' Audrey Conklin and Rachel Tesler contributed to this report.