Trade

Trump Proposes Massive Tariffs on EU Member France

JM Ashby
Written by JM Ashby

Trump had previously threatened to retaliate against France for passing a digital services tax that will invariably hit some of the largest tech companies in the world that just so happen to be based in America and now we know how they will retaliate.

The office of Trump's trade representative, Robert Lighthizer, has proposed a tariff of 100 percent(!) on $2.4 billion in French goods including wines, cheese, make-up, and other luxury goods.

The U.S. Trade Representative's office said its "Section 301" investigation found that the French tax was "inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies," including Alphabet Inc's Google, Facebook Inc, Apple Inc and Amazon.com Inc. [...]

"The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies," Lighthizer said. His statement made no mention of proposed digital taxes in Canada or Britain.

We're countering the "growing protectionism" of the European Union says a regime headed by the self-proclaimed "Tariff Man" who is waging a protectionist trade war against most of the planet.

Irony is already dead so we'll need to resurrect it if it's going to be killed again.

What's important to know about France's digital services tax is that it does not specifically target American-owned companies that operate in France. French and other European companies will also be taxed for operating inside France. That's how taxes work.

Imposing tariffs on French goods in "retaliation" for a domestic tax is an attack on French sovereignty itself as Trump tries to tell French lawmakers how to balance their own finances and what laws to pass.

France is a member of the European Union and a tariff on French goods is effectively the same as a tariff on all European goods as the EU trades as a single bloc. Imposing tariffs on French goods will lead to wider retaliation from the European Union on an equal amount of American goods; meaning American companies will pay a price for Trump's attempt to block a digital services tax in another country -- a tax that has nothing to do with them. And on and on we go until there's no one left to impose tariffs on.

Other countries aside from France have already passed or will soon pass digital services taxes and I suppose they should all line up for Trump's tariffs. That is unless this isn't really about a tax. Maybe it's really about Trump's hatred of French President Emmanuel Macron.

The U.S. Trade Representative will collect public comments beginning on January 15th and these tariffs will be imposed at some point soon after that.

  • David Greenberg

    Maybe it’s really about Trump’s hatred of French President Emmanuel Macron.

    This is it in a nutshell. Don’t waste time parsing subtleties. Think like a fat six year old bully who can’t get his way. He wouldn’t begin to understand the arguments you are discussing here. While he has a kind of evil shrewdness, he is basically as dumb as a bag of rocks.

  • notanncoulter

    and someone PLEASE explain to him again:
    WE PAY THE TARIFFS – not the country you are pissed off at.

  • notanncoulter

    i was under the impression that all these tariffs were being imposed under the guise of ‘national security’ and that’s how he was able to inflict them on us without congressional action?
    if that’s the new ‘magic word’ to do anything you feel like doing in a childish tantrum, then please do lets have universal health care provided by the government – something that actually resembles ‘national security’ as it secures the citizens, certainly more than taxing us does.
    and this just CAN’T have anything to do with getting into a little spat with macron, CAN IT?

    • muselet

      I am not a lawyer and I don’t play one on television. My understanding is based on what I’ve found online. I could be wrong, it’s happened before.

      With those disclaimers out of the way …

      Donald Trump has relied on Section 232 of the Trade Expansion Act of 1962 for a lot of his tariffs, especially early on. Section 232 allows the president to impose tariffs if “an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security.” [Wikipedia] The administration hasn’t bothered stating a national security justification for a while, though, even when invoking Section 232 authority.

      This is different. This is based on Sections 301–310 (collectively referred to as Section 301) of the Trade Act of 1974, which the administration has invoked against China, as well. Section 301 applies to foreign acts, policies and practices determined by the US Trade Representative to either violate or be inconsistent with a trade agreement; or are unjustifiable and unduly burden or restrict US commerce. [Congressional Research Service] A 3% tax on some designated online transactions does none of those things, but Robert Lighthizer has determined it does.

      It’s actually more complicated than I make it sound, but that’s the gist as I understand it.

      –alopecia

  • muselet

    Whatever the merits or otherwise of a 3% tax on certain digital transactions, it is beyond a stretch to claim such a tax constitutes a violation of a trade agreement or unjustifiably burdens or restricts US commerce. Besides which, the proper venue for adjudicating disputes like this is the World Trade Organization.

    This is another example of the Trump administration behaving like a belligerent drunk who’s spoiling for a fight.

    –alopecia