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Gafa tax: a respite in the standoff between France and the United States


Emmanuel Macron and Donald Trump agree to extend discussions on the taxation of digital giants. The threat of sanctions

The vice loosens. Whereas the American administration had announced wanting to overtax “up to 100%”, before the end of January, the equivalent of 2.4 billion dollars of French products, Emmanuel Macron announced on Monday that he was going work with Donald Trump "on a good agreement to avoid any tariff escalation". In a tweet posted at the start of the evening, the President of the Republic described the discussion he had with his American counterpart as "excellent".

Excellent discussion with @realDonaldTrump on digital taxation. We will work together on a good agreement to avoid any escalation in prices.

- Emmanuel Macron (@EmmanuelMacron) January 20, 2020

At stake, the taxation of Gafa (Google, Amazon, Facebook and Apple), a real hatchet between Paris and Washington. Since January 1, 2019, France has decided to impose a tax on large digital companies up to 3% of their turnover, pending the adoption of international taxation. The latter has been under discussion for several months within the OECD (Organization for Economic Cooperation and Development).

"It is far from being won"

Donald Trump's decision to delay the implementation of sanctions against French products - wine, champagne, Roquefort, leather goods, porcelain ... - comes on the eve of a crucial interview between the Minister of Economy, Bruno Le Maire , and the US Treasury Secretary, Steven Mnuchin, scheduled for Tuesday as part of the Davos Economic Forum (Switzerland).

"This is one of the most difficult negotiations I have carried out, it is far from being won", explained on Monday Bruno Le Maire who added: "If ever there were to be sanctions against France, the States - The United would take responsibility for opening a useless and costly trade war. Business leaders on both sides of the Atlantic feared the economic consequences of the US government's 100% tax.

During hearings conducted by the Trump administration in recent days, many American resellers of French products have warned: such a tax would be a disaster for their business. In France, the large Limoges porcelain houses - which export a lot to the United States - are among the most affected.

A first surcharge, 70 million euros in losses

But they are not the only ones. "A 100% tax would have very harsh effects on winegrowers," says Bruno Le Maire. At the Confederation of Independent Winegrowers of France (CVIF), we already measure the damage of the first surcharge of 25%, decided in October by the Americans following the subsidies granted by the European Union to Airbus: it caused losses of around 70 million euros. "It will be 100 million euros in total over a year, laments Jean-Jacques Jarjanette, the director general of the CVIF. Some companies are made to carry the weight of State decisions, this is not fair. "

Donald Trump and Emmanuel Macron have agreed to extend discussions on the taxation of digital giants until the end of the year. The file will be at the heart of the meeting planned on the sidelines of the Davos Forum between the American president and the head of the European executive, Ursula von der Leyen.

Source: leparis

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