Trump trade representative to investigate French tech tax

Trump trade representative to investigate French tech tax

U.S. President Donald Trump will order an investigation into France's planned tax on technology companies that could potentially lead to the United States imposing new tariffs or other trade restrictions, a source briefed on the matter said Wednesday.

The 301 probe was used on China past year resulting in the U.S. slapping tariffs on the country, The Washington Post reported. "The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain USA -based technology companies".

The French government says the tax does not specifically target U.S. companies and will affect European and Asian firms as well.

"The United States is very concerned that the digital services tax unfairly targets American companies".

A number of other countries are considering similar levies amid the belief that wealthy U.S. tech giants aren't paying enough tax worldwide. In a joint statement, Republican Chuck Grassley of Iowa, committee chairman, and Democrat Ron Wyden of OR said: "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 and harm American workers".

French officials didn't immediately provide comment.

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The measure is close to passing both houses of Parliament and could soon be signed by President Emmanuel Macron, who has voiced support for the tax.

The French digital services tax would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than 750 million euros ($844 million) and French revenue exceeding 25 million euros.

A U.S. tech-industry trade association this week criticised the French measure, saying tax disputes should be settled through a multilateral negotiation now being led by the Organisation for Economic Cooperation and Development.

Lighthizer said the United States "will continue its efforts with other countries at the OECD to reach a multilateral agreement to address the challenges to the worldwide tax system posed by an increasingly digitized global economy".

"Today's move by USTR is an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe", Jordan Haas, the director of trade policy for the Internet Association, said in a statement.