Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

French Defiance To Trump On Digital Tax Casts Shadow Over G-7

Published 07/17/2019, 08:27 AM
Updated 03/05/2019, 07:15 AM

A French-U.S. clash over digital taxation overshadowed the start of a Group of Seven finance chiefs meeting as France refused to flinch on its plan to impose levies that will hit American tech giants.

Just hours before an encounter with U.S. Treasury Secretary Steven Mnuchin at the G-7 near Paris, French Finance Minister Bruno Le Maire pledged to forge ahead with a three per cent levy on digital revenues of large companies. France hopes its drive will pressure the U.S. to be more constructive in talks on creating a similar tax globally on profits.

“What I will try to explain to Mnuchin is that it is the U.S. interest to put in place such a taxation for the new economic model, based on data,” Le Maire said on French radio France Inter.

Le Maire’s defiance is likely to meet with a chilly response from U.S. President Donald Trump’s administration. According to a report on Wednesday in Spanish newspaper El Mundo, the U.S. State Department has sent letters to embassies in several countries, including Spain, ordering them to alert governments that retaliation will follow if they go down the same path as France.

EURUSD Chart

Retaliation Threat

U.S. Trade Representative Robert Lighthizer already reacted last week to the French parliament’s approval of the tax by launching a probe to determine whether the measure is “discriminatory or unreasonable and burdens or restricts United States commerce.” The U.S. could ultimately impose retaliatory tariffs or other trade limits, or even use provisions in the tax code to punish French citizens and companies.

The G-7 meeting at the Chateau of Chantilly, north of the French capital, will be a suitable venue to reach agreement on the matter, Le Maire said.

“The best and wisest decision would be to find an international solution,” he said. “The G-7 is the right moment to decide on that international tax scheme.”

Le Maire claims he has a good working relationship with Mnuchin that will help achieve that.

“We have been working very well together,” he told a conference in Paris on Tuesday. “I am sure we will continue to do so. I want to thank Steven for his commitment and his ability to work towards compromises,” Le Maire said in Paris Tuesday.

Original Post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.