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Trump versus France spat intensifies with threat of 100% wine tariffs

Published:  03 December, 2019

Tariffs on French wine entering the US could be subjected to 100% tariffs, authorities have warned, following an investigation into whether a new technology tax in France unfairly targets American companies.

The Trump administration yesterday proposed the new heightened tariffs, which could affect up to $2.4bn of French goods, including wine and Champagne.

It follows mounting tensions between the US and France after a transatlantic row erupted in back in July, with Trump threatening to drag French wine over the coals in retaliation for a tax that will significantly affect US tech companies like Google, Apple, Amazon and Facebook, which are widely used in France.

Some had hoped the dispute would ease in August, when France and America agreed on a 90-day pause to allow negotiations to take place for a multinational truce on so-called “digital taxes”.

Now however, things have escalated.

In a report rereleased yesterday (December 2), a US trade body found that the tax “discriminates” against “US ‘digital giants’ and not French and European companies”.

“The French DST (Digital Services Tax) is intended to, and by its structure and operation does, discriminate against US digital companies,” reads the report, which makes reference to the French parliament, “repeatedly refer[ing] to the French DST as the ‘GAFA tax,’ which stands for Google, Apple, Facebook, and Amazon”.

“A range of tools may be appropriate to address these serious matters, including intensive bilateral engagement, WTO dispute settlement, or imposing duties, fees, or other import restrictions on the goods or services of France.”

The recommnedation from Trump’s administration to slap $2.4bn of tariffs on French goods, which was given following the report, also follows another decision in October to impose $7.5bn of extra tariffs on European imports.

This morning, French finance minister Bruno Le Maire called the new threat “unacceptable”.

“If there should be new sanctions from the Americans, the EU is ready to retaliate,” Maire said on French radio.

He said the proposals were “in no one’s interest. It’s not in the interest of growth or of political stability”.