The French response was clear: "Never, never, never will we give up our just desire to tax the Internet giants," Bruno Le Maire, the Paris Minister of Finance and Economy, said full-bodiedly.
This was preceded by a verbal attack by the US President, once again. Shortly before his departure for the NATO summit in London, Donald Trump threatened to impose tariffs of up to 100 percent on French imports of US $ 2.2 billion. As a countermeasure for France's now famous digital tax.
A few hours later, Trump met his direct adversary, French President Emmanuel Macron - and suggested again more conciliatory tones: "It may come to a mutually beneficial tax," said the US President at a joint press conference in London View. It was more a matter of a "small dispute". He kept his threat upright for safety's sake. Finally, the EU treated its country as "very, very unfair" on trade issues.
A little consideration may be due to the parallel dispute between Macron and Trump over NATO, which overshadows the trade conflict in London. But a long-term agreement between Paris and Washington is also not in sight on trade issues. Too much Macron has committed to the digital tax. It's too easy for Trump to show France to the world.
THE MIRROR
Both sides have legitimate concerns. "We're helping Europe," Trump said in the direction of Macron, targeting the US trade deficit with Europe, which stood at $ 114 billion in 2018 and increased 18 percent in the first half of 2019.
The French trade surplus with the USA even increased by 50 percent during this time. Evidence that relatively strong economic growth in the US also boosted French companies, while Europe's relatively weak economy slowed US exports. Was this the right time for the Paris government to impose "a tax out of the blue," as Trump accused Macron of now?
Germany fears the wrath of the US president
Of course, the French president had already announced the digital tax in his election program in the spring of 2017. GAFA tax is called in France because they are the first Google, Amazon
But Macron and his minister responsible Le Maire will not give up. The digital tax was also an important concern for them in the past European election campaign. They wanted to prove to the anti-European competition of the right-wing extremists of Marine Le Pen that Europe does not kiss the US.
That went pretty well in the election campaign. But at the latest after the elections, the Paris government was alone. Berlin did not want to go along. So Le Maire defended a purely French digital tax in the French National Assembly last summer. The potential revenue was estimated at millions rather than billions. But it was about the principle.
That's what it's all about. And on both sides. Trump is unlikely to feel that his taxes on French champagne and other extravagances made in France will make his disastrous trade balance sustainable. But the threat is so good.
Wine growers are exempted for now
Prompt on Monday in Paris gave the stock market values of the famous French luxury goods companies such as LVMH
But even Macron does not go from the conflict empty-handed. Every direct exchange with Trump increases his reputation at home. And where it hits the richest in France, the political damage is limited. There are no mass layoffs for companies like LVHM.
More could threaten the impending US tariffs simple French wine growers. But Trump has for the time being excluded from his penalty list.
So, in the end, do both, Trump and Macron, benefit from the same commercial theater? This is probably too much money. A more comprehensive digital tax, as discussed by the OECD, the Organization for Economic Development and Industrialized Co-operation, would bring governments hundreds of billions of new tax revenues. France's variant would be just a stripped down. The OECD is looking for a global compromise, so far also at the request of the United States. This gave the Federal Government in Berlin so far an argument not to follow the Paris solo action. But according to recent reports, the US is now blocking the OECD deliberations on the digital tax. Also only a countermeasure against the cheeky France?
If one had to tax Google, Amazon, Facebook and Apple, then only the US, Trump understood in London. This is precisely what Macron wants to prevent with a European digital tax, which taxes the consumption of digital services locally in Europe. So the fight is far from over. And Berlin will one day have to decide which side it is on.