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U.S. Begins Inquiry Into French Digital Services Tax That May End in Tariffs

WASHINGTON — The Trump administration said on Wednesday that it would investigate whether a French plan to impose a tax on big American technology companies amounts to an unfair trade practice that could be punished with retaliatory tariffs, escalating its global trade fight.

The investigation, which will be carried out by the United States trade representative, is the latest attempt by the Trump administration to shelter American companies by targeting trading partners. It also continues the administration’s push to elevate and protect American technology companies by erecting trade and other barriers.

France has proposed a 3 percent tax on the revenue some companies earn from providing digital services to French users, a measure that would include Amazon, Apple, Facebook and Google. France had been working with other European countries on a Continent-wide digital tax, but some members of the bloc had balked at the proposal, prompting France to move ahead on its own.

French officials have estimated the total tax bill for the companies affected at about 500 million euros, or about $563 million.

In a statement, the United States trade representative said the French tax targeted services “where U.S. firms are global leaders,” suggesting, “France is unfairly targeting the tax at certain U.S.-based technology companies.”

Robert Lighthizer, the Trump administration’s top trade negotiator, said that the United States was “very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.”

“The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce,” he said in a statement.

The investigation will be carried out under Section 301 of the Trade Act of 1974, a legal provision that gives the president broad authority to retaliate against trading partners and the mechanism Mr. Trump has used to impose sweeping tariffs on China.

This content was originally published here.

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