PARIS (AP) — France is bristling at a U.S. threat to slap 100% tariffs on French cheeses, Champagne and other products, with the French leader telling President Donald Trump on Tuesday that the move would amount to an attack on all of Europe.
The U.S. Trade Representative proposed the tariffs on $2.4 billion in goods Monday in retaliation for a French tax on global tech giants including Google, Amazon and Facebook.
France’s reaction was swift and robust, with President Emmanuel Macron and his finance minister both warning of a European riposte if the U.S. measure is implemented.
“We’ll see where the discussions lead in the coming weeks, but it will involve a European response,” Macron said in a meeting with Trump on the sidelines of a NATO summit in London. “Because, in effect, it wouldn’t be France that is being sanctioned or attacked but Europe.”
Macron said it’s “not fair” that digital revenues are taxed less than real-life revenues. He said France shouldn’t be singled out for wanting to correct that imbalance with a tax on tech firms.
“My first question is what will happen with the United Kingdom, which adopted the same tax? For Italy, the same tax? Austria, Spain ...,” Macron asked. “If we’re serious, those countries will have to be treated the same way.”
The U.S. move is likely to increase trade tensions between the U.S. and Europe. Trump said the European Union should “shape up, otherwise things are going to get very tough.”
“I’m not in love with those (tech) companies, but they’re our companies,” Trump said ahead of his meeting with Macron.
French Finance Minister Bruno Le Maire said the U.S. tariff threat is “simply unacceptable. ... It’s not the behavior we expect from the United States toward one of its main allies.”
The French tech tax, he said, is aimed at “establishing tax justice.” France wants digital companies to pay their fair share of taxes in countries where they make money instead of using tax havens, and is pushing for an international agreement on the issue.
The problem is pronounced in Europe, where a foreign company can pay most of its taxes in the one EU country where it has its regional base - often a small country like Luxembourg or Ireland that tries to attract multinationals with very low corporate taxes.
Le Maire noted that France will reimburse the tax if the U.S. agrees to the international tax plan.
French wine and cheese producers expressed dismay about being caught in the middle of the battle over digital revenues. Cheese producers warned the U.S. measure would hit small businesses hardest.