Trump Orders Investigation Into Proposed French Tax Plan That Would Unfairly Target U.S. Tech Companies

  • On news that France is planning on taxing large tech companies, President Trump ordered an investigation into the allegations. If true, the U.S. could impose trade restrictions or tariffs on its own.
  • Trump has authorized a “Section 301” investigation, which “will determine if the levy poses an unfair trade practice.”
  • Past investigations have looked into Chinese trade practices and EU “subsidies on large commercial aircraft.”
  • The investigation would allow authorities up to one year to determine if France’s proposed tax plan would unfairly target U.S. tech companies.
  • U.S. Trade Representative Robert Lighthizer said: “The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.”
  • In March, French Finance Minister Bruno Le Maire said “that a 3% tax on the French revenue of large internet companies could yield 500 million euros ($563 million) a year.”
  • Companies like Google, Amazon, Apple and Facebook would be affected since their annual revenues are more than $844 million.
  • The U.S. said that “services covered are ones where U.S. firms are global leaders. The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain U.S.-based technology companies.”
  • Lighthizer said: “Trump has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”
  • Jennifer McCloskey, vice president of policy at ITI, a U.S. tech-industry association released a statement: “France’s move to enact a unilateral, national digital tax opens the door to a fragmented, inefficient global tax system that would reduce business certainty and impede innovation, job creation, and economic growth worldwide.”
  • McCloskey added: “We recognize the challenges that arise as the global economy becomes increasingly digitized but proceeding unilaterally would complicate economic relationships around the world and lead to undesirable measures to address France’s action.”
  • There’s bipartisan support for the investigation and Senators Chuck Grassley and Ron Wyden released a statement: “The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S. jobs and harm American workers.”

Reference Links

  • Reuters: U.S. to probe French plan to tax tech companies READ
  • Fox: Trump administration investigates proposed French tax on US tech firms READ
  • Bloomberg: U.S. Investigates France’s Plan for Tax on Tech Giants READ
  • Express: Trump LASHES out at Macron as US express ‘concern’ over French plan to tax tech giants READ

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