France does not seek trade war with US, but can retaliate if it comes to that – finance minister

Paris will not sit idle if Washington implements its threat to hit French goods with tariffs, Finance Minister Bruno Le Maire stated as he touched on a simmering row on the taxation of US tech giants.

“We want to avoid a trade war, but we’re ready to respond, with our European partners, if we’re hit with sanctions that we think are inappropriate, unfriendly and illegitimate,” the minister said in an interview to Le Journal du Dimanche newspaper.

Last year, French lawmakers supported a new tax on internet heavyweights, also known as GAFA tax, as the levy essentially targets some American companies, such as Google, Apple, Facebook and Amazon. The new scheme was aimed at making the tech behemoths pay taxes on revenues they generate from providing services to French consumers to the French budget instead of giving them the opportunity to enjoy declaring them in rather low-tax countries.

The Trump administration has repeatedly condemned France’s move, saying that it “discriminates” against US companies, and has vowed to impose tariffs in response. 

The US wants to target some of the most sensitive French imports, such as wine, cheese and cosmetics, with up to 100 percent levies. Some $2.4 billion worth of products could be hit, according to the preliminary list issued by the US Trade Representative in December. The USTR plans to hold public hearings on the measure on January 7 and will accept public comments through January 14.

France has denied that the tax has any discriminatory nature, repeatedly lambasting the proposed sanctions. In his latest interview, Le Maire said that Paris could withdraw its national digital tax if the Organisation for Economic Cooperation and Development (OECD) reaches a satisfactory decision on the matter or the discussion to set up an EU-wide tax is renewed in Brussels.

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