08 January 2021

France calls for global agreement as US freezes tariffs over tech tax

08 January 2021

France’s government has breathed a sigh of relief after the US indefinitely delayed tariffs on French wine, cosmetics and other goods designed as retaliation for a French tax on technology giants.

The US Trade Representative’s office said in a statement that it suspended the tariffs targeting France which had been scheduled to enter into force this week, because it is investigating similar tech taxes from a growing number of other countries too.

French finance minister Bruno Le Maire said his government “takes note” of the US decision and called for a global agreement on taxing online behemoths such as Google and Amazon.

It is among multiple trade disputes that have damaged transatlantic ties in recent years.

Google (PA Archive)

In a statement to the Associated Press, Mr Le Maire urged “a global settlement of trade disagreements between the United States and Europe, which make everyone lose, especially in this time of crisis”.

The US government argues that the French tax unfairly targets American companies.

France says its tax targets any company with huge revenues, and is aimed at making the tech giants pay taxes in the countries where they do business instead of tax havens.

While France has led the charge on tech taxes, several other countries have introduced similar measures that worry the US, including Britain, India, Turkey and Brazil.

Negotiations on a global tech tax deal at the Organisation for Economic Co-operation and Development stalled after the Trump administration pulled out last summer.

France and others hope that the Biden administration will be more amenable to reaching a deal.

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