The trade relationship between the United States and the European Union is unfair. This was stated by US President Donald Trump on Tuesday during the NATO summit in London. It is not the first time Trump has complained about the relationship between the US and the EU. He has previously threatened multiple times to impose taxes on imports of European products.
The US is likely to impose import duties on $2.4 billion worth of French goods in retaliation for the French digital tax, the so-called digitax, which mainly affects large American tech companies. Regarding this, Trump said that the United States and France do a lot of trade with each other and that this is a “small issue.”
The French parliament approved the digitax in July, which requires international tech companies to pay three percent tax. The French measure, which applies retroactively as of January 1 of this year, only applies to companies with a turnover of more than 750 million euros annually. According to the president, this French levy mainly targets American technology companies such as Amazon and Google. Trump calls the tech tax “nonsense.”
French cheese, wine, makeup, and handbags could potentially face a tariff increase of up to 100 percent. First, there will be a consultation process. During this period, responses to the plans can be made until January 6, followed by a public hearing the next day. If approved, the US president can implement the import tariffs at his discretion.
The new tariff sends a clear signal that the United States will take action against digital tax schemes that discriminate against American companies or otherwise impose unnecessary burdens,” said the US trade representative. The US reportedly is also investigating similar laws in Austria, Italy, and Turkey. The UK has also taken steps towards a tech tax.
In addition to these American sanctions against France due to the digital tax, the US will soon impose additional import duties on a large number of European products due to previous European subsidies for the development and construction of the European aircraft Airbus.