Trade

Trump May Open Another New Front In His Trade War

JM Ashby
Written by JM Ashby

The Trump regime announced yesterday that it has launched an investigation of France's planned tax on internet companies, accusing the French government of unfairly targeting American companies.

The idea that a measly tax of just 3 percent on certain services would be unfair to the most valuable companies on the planet is nonsense, but this investigation could still lead to more tariffs on the European Union.

WASHINGTON (Reuters) - U.S. President Donald Trump on Wednesday ordered an investigation into France’s planned tax on technology companies, a probe that could lead to the United States imposing new tariffs or other trade restrictions. [...]

The “Section 301” investigation will determine if the levy poses an unfair trade practice. Prior investigations have covered Chinese trade practices and European Union subsidies on large commercial aircraft.

USTR said in a statement the “services covered are ones where U.S. firms are global leaders. The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain U.S.-based technology companies.”

The fact that the likes of Google, Facebook, and Amazon are owned by Americans is more or less incidental as far as this discussion is concerned. They're international corporations that actually service far more humans outside the United States than inside the United States. Facebook, for example, has almost 2.4 billion monthly active users while approximately 2 billion people use Google's Android operating system on their phones. That includes just 169 million and 107 million users respectively inside the United States. We're the minority.

The idea that France is not allowed to impose a local tax on internet services just because the largest and most successful of those service providers are owned by Americans is, well -- it's not how anything works.

France is a sovereign nation that is free to tax goods and services however their citizens and representatives see fit. So is the United States, for that matter, and I don't see the Trump regime threatening to impose sanctions on Texas for leading the fight to collect sales tax from Amazon.

The Trump regime really does believe the United States is the only sovereign nation in the world and that all others are merely client states. But our clients have every right and reason to tell us to fuck ourselves.

For their part, the lobby that represents the internet companies that could be taxed by France has bumbled and stepped on their own dicks by urging the Trump regime to investigate the tax but not impose tariffs.

Technology industry lobby group ITI, which represents Apple, Amazon, Google and other tech companies, urged the United States not to resort to tariffs in the dispute.

We support the U.S. government’s efforts to investigate these complex trade issues but urge it to pursue the 301 investigation in a spirit of international cooperation and without using tariffs as a remedy,” Jennifer McCloskey, ITI’s vice president of policy, said in a statement.

This shit right here is why we're mired in Trump's endless trade war.

Trump is always going to do the thing you don't want him to do and paying lip service to his 'investigations' does nothing but justify his actions.

Business lobbies haven't learned a damn thing. They should suck it up, eat the tax and smile about it because what Trump will do could be far worse than a small tax they'll probably find a way to dodge anyway.

  • muselet

    There is no constituency for retaliatory tariffs. The tech industry seems pretty okay with a 3% tax on sales—in large part because France could have taxed them at the same rate they tax other companies’ sales—so what’s the reason for even thinking about tariffs? Is Donald Trump’s only response to any trade issue, real or imagined, to apply tariffs?

    Madness.

    –alopecia

    • I think it is. He has no concept of negotiation or international trade complexities; his only response is to bully the other side into giving him everything he wants.

      Not to mention the fact that once he gets idea into his head (like tariffs), it’s impossible to get it out short of an industrial drill and a backhoe, and he’ll use that idea on everything until he finally gets bored with it.

      • muselet

        “An industrial drill and a backhoe.”

        Thanks for the chuckle.

        –alopecia