Bloomberg, U.S. May Retaliate on French Digital Tax Monday After Probe:
The U.S. will announce on Dec. 2 what retaliatory action, if any, it will take in response to a digital tax France instituted this year that will hit large American tech companies.
President Donald Trump and France's Emmanuel Macron had agreed in August to try and negotiate a compromise, but a 90-day deadline for talks expired this week without a resolution.
In a statement Wednesday, the U.S. Trade Representative's office said it would proceed with the investigation and announce its findings on Monday. At that time, it "also will announce any proposed action in the investigation."
New York Times, Trump’s Tax Truce With France Expires, but the Path Ahead Remains Unclear:
A brief truce in what had been an escalating battle between the United States and France over taxing digital services has expired, but President Trump gave no indication this week whether he planned to return to his threats to impose new tariffs on imported wine and other French products as a result.
French leaders voted this year to impose a new tax on economic activity that takes place online and crafted it in such a way that it would largely hit large American tech companies like Amazon and Facebook.
In response, the Trump administration opened an investigation into whether the tax posed a threat to national security and should be met with American tariffs on French products.
Mr. Trump vocalized the threat of tariffs in July. Soon after, the countries reached a 90-day agreement that paused the American retaliation, while leaders from wealthy countries including France and the United States pursued negotiations toward an international agreement on digital taxation.
France’s tax stems from concerns that it is not capturing any revenue from activities of companies that sell or advertise online to its citizens yet. That concern is shared by a growing number of countries outside America, including Britain, Italy and Canada.
The Organization for Economic Cooperation and Development is spearheading negotiations between the countries as it tries to avoid an arms race of sorts among countries seeking to capture revenue from digital commerce that crosses borders. Participants have set an ambitious goal to reach an agreement in principle sometime next year, and key negotiators will meet next month in Paris to continue the process.
A final global agreement would most likely overhaul how countries tax commerce that crosses borders, and it could grow to cover large automakers and other multinational companies — not just tech firms.
Some tax experts who have been tracking the deliberations predict that the Trump administration will extend the truce period, perhaps unofficially, until at least January when the Organization for Economic Cooperation and Development is expected to give an update on the status of the negotiations.