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| U.S. Begins Inquiry Into French Digital Services Tax That May End in Tariffs | |
| (32 minutes later) | |
| WASHINGTON — The Trump administration said on Wednesday that it would investigate whether a French plan to impose a tax on big American technology companies amounts to an unfair trade practice that could be punished with retaliatory tariffs, escalating its global trade fight. | |
| The investigation, which will be carried out by the United States trade representative, is the latest attempt by the Trump administration to shelter American companies by targeting trading partners. It also continues the administration’s push to elevate and protect American technology companies by erecting trade and other barriers. | |
| The move threatens to further stoke tensions with the European Union, which President Trump has already threatened with auto tariffs and criticized for selling more goods to the United States than it purchases. | The move threatens to further stoke tensions with the European Union, which President Trump has already threatened with auto tariffs and criticized for selling more goods to the United States than it purchases. |
| France has proposed a 3 percent tax on the revenue some companies earn from providing digital services to French users, a measure that would include Amazon, Apple, Facebook and Google. France had been working with other European countries on a Continent-wide digital tax, but some members of the bloc had balked at the proposal, prompting France to move ahead on its own. | |
| French officials have estimated the total tax bill for the companies affected at about 500 million euros, or about $563 million. | French officials have estimated the total tax bill for the companies affected at about 500 million euros, or about $563 million. |
| In a statement, the United States trade representative said the French tax targeted services “where U.S. firms are global leaders,” suggesting, “France is unfairly targeting the tax at certain U.S.-based technology companies.” | |
| Robert Lighthizer, the Trump administration’s top trade negotiator, said that the United States was “very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.” | Robert Lighthizer, the Trump administration’s top trade negotiator, said that the United States was “very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies.” |
| “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce,” he said in a statement. | “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce,” he said in a statement. |
| The investigation will be carried out under Section 301 of the Trade Act of 1974, a legal provision that gives the president broad authority to retaliate against trading partners and the mechanism Mr. Trump has used to impose sweeping tariffs on China. | The investigation will be carried out under Section 301 of the Trade Act of 1974, a legal provision that gives the president broad authority to retaliate against trading partners and the mechanism Mr. Trump has used to impose sweeping tariffs on China. |
| Major American tech companies, which opposed the French tech tax, cheered the investigation. Jordan Haas, the director of trade policy for the Internet Association, which represents the American industry, said his group “applauds U.S.T.R.’s prompt action.” | Major American tech companies, which opposed the French tech tax, cheered the investigation. Jordan Haas, the director of trade policy for the Internet Association, which represents the American industry, said his group “applauds U.S.T.R.’s prompt action.” |
| “Today’s move by U.S.T.R. is an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe,” Mr. Haas said. | “Today’s move by U.S.T.R. is an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe,” Mr. Haas said. |
| Lawmakers have also been critical of France’s push to tax tech companies. | |
| “The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S. jobs and harm American workers,” Senators Charles E. Grassley, Republican of Iowa, and Ron Wyden, Democrat of Oregon, said in a joint statement. | “The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S. jobs and harm American workers,” Senators Charles E. Grassley, Republican of Iowa, and Ron Wyden, Democrat of Oregon, said in a joint statement. |
| “We have urged the administration to consider all available tools to address this discriminatory action and applaud the U.S. trade representative for launching an investigation,” the senators said. | “We have urged the administration to consider all available tools to address this discriminatory action and applaud the U.S. trade representative for launching an investigation,” the senators said. |