Trump threatens 'reciprocal action' on French tax of American tech companies

Trump threatens 'reciprocal action' on French tax of American tech companies

Trump said he still had a "good relationship" with French President Emmanuel Macron and recently spoke with him about the conflict. About 30 businesses would be affected; majority are American, but the list also includes Chinese, German, British and French firms.

Le Maire emphasized, "There is no desire to specifically target American companies", since the 3% tax would be levied on revenues generated from services to French consumers by all of the world's largest tech firms, including Chinese and European ones.

Meanwhile, Mr Trump has also rejected Apple's bid to avoid tariffs on some computer parts it manufactures in China, saying the company should instead make the components in the US.

Two weeks ago, the French Senate approved the 3 per cent levy that will apply to revenue from digital services earned in France by companies with more than 25 million euros ($A40 million) in French revenue and 750 million euros ($A1.2 billion) worldwide. The tax is created to stop multinationals from avoiding taxes by setting up headquarters in low-tax European Union countries.

Trump blasted Macron's "foolishness" for pressing ahead with the French levy and warned his administration would announce "substantial reciprocal action".

His remarks came after US President Donald Trump denounced, in a Twitter message on Friday, an unfair tax which he said targets only American companies.

Responding to a question, Trump said he "might" impose tax on French wine.

Le Maire took the same line at a news conference Saturday: "We wish to work closely with our American friends on a universal tax on digital activities". "Make them in the US, no Tariffs!" he wrote. "I think he's either defending them, or he wants to bargain something in this deal", Mirkovic said.

Trump added. "American wines are great, and they didn't do the right thing when they start taxing our companies".

Trump has complained about France charging tariffs on USA wine in the past - without taking action.

France not backing down French Economy Minister Bruno Le Maire indicated that Paris was not backing down on its tech taxes. I just like the way they look. Ok.

The U.S. Supreme Court has just OKed the use of $2.5 billion in Pentagon funds for President Trump to use to build a wall across our southern border, setting aside a stay issued by the 9th Circuit.

In response, the U.S. Trade Representative (USTR) initiated an investigation on July 10 against France under Section 301 of the Trade Act of 1974, accusing the French government of "unfairly targeting the tax at certain U.S. -based technology companies". But France passed the new legislation anyway.

The federation urged French and American authorities to pursue dialogue on the tax issue, expressing hope "that they can quickly find a path to follow to prevent these threats from materializing". According to 2018 figures from the European Commission, global tech companies pay a 9.5% average tax rate compared with 23.2% for traditional firms.

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