In July, France signed into law a tax, which targets companies with high digital revenues such as Facebook, Google, and Amazon. On Monday, the Office of the U.S. Trade Representative (“USTR”) announced the conclusion of an investigation into France’s digital tax under Section 301 of the Trade Act of 1974 (“Section 301”). The USTR found that the French digital tax discriminates against U.S. digital companies and is inconsistent with prevailing tax principles. The announcement added that the “USTR is exploring whether to open Section 301 investigations into the digital services taxes of Austria, Italy, and Turkey.”
Based on the report, Ambassador Lighthizer proposed tariffs up to 100% on $2.4 billion worth of French products including sparkling wine, handbags, makeup, and cheese. A public hearing regarding the proposed tariffs will be held on January 7, 2020. The public is invited to comment on the proposed tariffs before January 6, 2020 and to submit post-hearing rebuttal comments by January 14, 2020.
On Tuesday, French Finance Minister Bruno Le Maire called the proposed tariffs “unacceptable” and stated that the European Union would be ready with a response if the tariffs take effect.