US vows 100% tariffs on French Champagne, cheese, handbags over digital tax

FILE PHOTO: An employee serves a glass of Champagne during the traditional wine harvest at the Champagne house Deutz in Ay, France - Reuters

WASHINGTON (Reuters): The US government on Monday said it may slap punitive duties of up to 100% on $2.4 billion in imports from France of Champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm U.S. tech companies.

The US Trade Representative’s office said its “Section 301” investigation found that the French tax was “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected US companies,” including Alphabet Inc’s Google, Facebook Inc, Apple Inc and Amazon.com Inc.

US Trade Representative Robert Lighthizer said the government was exploring 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 unfairly targets US companies,” Lighthizer said. His statement made no mention of proposed digital taxes in Canada or Britain.

The US trade agency said it would collect public comments through 14 January on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for 7 January.

It did not specify an effective date for the proposed 100% duties.

The list targets some products that were spared