U.S. vows 100% tariffs on $2.4 billion of French products over digital services tax – Reuters

FILE PHOTO: An employee serves a glass of Champagne during the standard white wine harvest at the Champagne house Deutz in Ay, France, September 22, 2016. REUTERS/Benoit Tessier/File Photo WASHINGTON (Reuters )-The U.S. government on Monday stated it may slap punitive duties of as much as 100% on $ 2.4 billion in imports of French Champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm U.S. tech companies.

The U.S. Trade Representative’s office said its “Section 301” examination found that the French tax was “irregular with prevailing principles of global tax policy, and is unusually difficult for affected U.S. business”, consisting of Alphabet Inc’s Google (GOOGL.O), Facebook Inc (FB.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O).

U.S. Trade Representative Robert Lighthizer stated the U.S. federal government was likewise checking out whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

“The USTR is focused on countering the growing protectionism of EU member states, which unjustly targets U.S. business, whether through digital services taxes or other efforts that target leading U.S. digital services companies.”

The trade agency stated it would collect public discuss its proposed tariff list through Jan. 14 and hold a public hearing on Jan. 7. It did not specify a reliable date for the proposed 100% duties.

The list targets some items that were spared from 25% tariffs enforced by the United States over disputed airplane aids, consisting of sparkling red wines, bags and make-up preparations – products that would hit French high-end items giant LVMH (LVMH.PA) and cosmetics maker L’Oreal (OREP.PA) hard.

The findings won favor from U.S. lawmakers and U.S. tech market groups.

“The French digital services tax is unreasonable, protectionist and discriminatory,” Senators Charles Grassley and Ron Wyden, the top Republican and Democrat, respectively, on the Senate Finance Committee, said in a joint statement.

A spokesperson for the French embassy in Washington could not instantly be grabbed remark.

Reporting by Andrea Shalal And David Lawder; Editing by Leslie Adler and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

The trade agency said it would collect public comments on its proposed tariff list through Jan. 14 and hold a public hearing on Jan. 7.

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