On Monday, the US government said it may impose punitive duties of up to 100% on $2.4 billion of imports from France, including champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm US tech companies.
French Finance Minister Bruno Le Maire described the US proposals as “unacceptable”. “In case of new American sanctions, the European Union would be ready to riposte,” Le Maire told Radio Classique.
French junior economy minister Agnes Pannier-Runacher told Sud Radio that France would be “pugnacious” in its dealings with the US on the matter, and that France would not back down on its digital tax plans.
France’s 3% levy applies to revenue from digital services earned by companies with more than 25 million euros ($27.86 million) in French revenue and 750 million euros ($830 million) worldwide.
But the US Trade Representative’s office said on Monday that its investigation found that the French tax was “inconsistent with prevailing principles of international tax policy”.
It said it found the French tax proposal “unusually burdensome for affected US companies,” including Alphabet Inc’s Google, Facebook Inc, Apple In and Amazon.com Inc.
The latest ruling by the US government knocked down leading French luxury-goods stocks. Shares in LVMH, Kering and Hermes fell 1.4% to 1.5% in early trading.
“It’s too risky to go into the luxury sector. The sector was hit first of all by the Hong Kong protests, and now this will hit it even more,” said Clairinvest fund manager Ion-Marc Valahu.
