The United States imposed punitive tariffs of 25% on French exports worth 1.3 billion a year, in response to a French tax targeting US internet giants, noting that it has now decided to suspend these duties to allow the two countries to reach a solution.
Reuters quoted US Trade Representative Robert Lighthizer as saying that ” the French tax on the services of internet companies is unreasonably targeted and discriminatory against US technology companies,” noting that Washington will suspend implementation of the decision to impose punitive tariffs until January 6, 2021 as negotiations continue between the two parties, including dialogue within the OECD.
On July 11, 2019, the French parliament passed a tax on internet giants, making France the first country to tax Gaffa (short for Google, Amazon, Facebook and Apple) and other multinationals accused of tax evasion.
On the eve of the French parliament’s decision, the US decided to conduct a study to assess the implications of this tax on US companies, while US President Donald Trump threatened to impose 100% punitive tariffs on French products
Punitive fees include cosmetics, French handbags, cheeses and some drinks, and are worth up to 2 2.4 billion.