U.S. to suspend retaliation contingent on France suspending digital tax

U.S. Trade Representative Robert Lighthizer said on Thursday that the Trump administration will announce actions against France over its digital services tax but will defer them while France defers tax collections from U.S. technology firms.

In May, French finance minister Bruno Le Maire vowed that France would tax big digital businesses this year whether there is progress or not towards an international deal on a levy, claiming that such a tax had never been more legitimate or more necessary.

Last December, the U.S. vowed 100% tariffs on $2.4 billion in imports from France over such a digital tax that would harm U.S. tech firms including Apple.

Steve Goldstein for MarketWatch:

“We’re going to announce that we’re going to be taking certain sanctions against France, suspending them like they’re suspending collection of the taxes right now,” Lighthizer said, according to Reuters. The U.S. says the French tax discriminates against companies such as Alphabet, Facebook, and Apple.

Reuters:

The United States last month withdrew from multilateral talks to reach a global solution on digital services taxation, citing a lack of progress in the negotiations.

MacDailyNews Take: Carrot and stick.

As we wrote back in April 2019:

As per the EU itself, the smart approach for Apple et al. is to lobby for harmonized EU taxation over a state-by-state patchwork of taxes, as that will at least offer simplicity, stability, and predictability.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]