The United States threatens to impose 100% tariffs on French cheese and champagne

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(CNN Business) - US trade officials on Monday proposed a wave of tariffs on French products, after publishing a report that found that there is a new tax in France on digital services - which affects large US technology companies like Facebook and Google— that represents a trade barrier.

The list of proposed US tariffs covers dozens of products, including cheeses, beauty products, bags and sparkling wines such as champagne. The measure runs the risk of increasing the transatlantic trade tensions after the United States has already taxed European products worth 7.5 billion dollars, including French wine, Italian Parmesan cheese and Scotch whiskey, in October, for subsidies to Airbus aircraft manufacturer.

Approximately 2.4 billion dollars in French products could be subject to new taxes of up to 100%, the US Trade Representative (USTR) office said Monday. The public will have until early January to evaluate the proposal.

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The report and the proposed tariffs could create a new gap between the members of the European Union and President Donald Trump, who in July threatened France with "substantial reciprocal action" if he advanced with his digital services tax.

Trump told reporters in London on Tuesday that although he "was not in love" with Facebook and Google, he would defend American companies.

"I will not let people take advantage of American companies," Trump said Tuesday. "If someone will take advantage of American companies, it will be us, it will not be France."

French Finance Minister Bruno Le Maire said the European Union "would be ready to retaliate strongly" against the US sanctions. Le Maire told the French radio station Radio Classique that the latest proposal on French products is “unacceptable,” adding that he has shared his point of view with the United States trade representative, Robert Lighthizer.

"It is not what one would expect from an ally, it is not what one would expect from the United States," said Le Maire.

The actions of French luxury products fell in response. For example, Hermes and Gucci's owner, Kering, fell 1.7% in Paris. LVMH, which produces leather and champagne items, fell 1.9%.

The French measure, which was approved in the middle of this year, charges a 3% tax on the income obtained by companies that provide digital services in the country. Several other countries, including Spain, Italy and the United Kingdom, are considering approving similar measures, so the officials of the technology industry and the US. UU. They care about the fragmentation of the global corporate tax system.

Lighthizer's Monday report is likely to renew an international debate on the power of large technology platforms and how they should be regulated worldwide.

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Technology industry groups welcomed the USTR report

"Discriminatory taxes on digital services act as a trade barrier for innovative American businesses and small businesses that often face the greatest burden on them," the Internet Association, a technology trading group, said in a statement. The group called the French tax "one of a growing number of worrying unilateral tax regimes worldwide."

On Monday, Cedric O, secretary of state of France for digital economy, began a week-long tour of the United States that began in Washington, where he met with current and former officials of the White House, the Federal Communications Commission and the Federal Trade Commission He is also expected to meet with US lawmakers and Eric Schmidt, the former Google executive president.

"At a time when the European Union is organizing to speak with one voice, cooperation with the United States and its actors is essential to promote a new digital world," O said in a statement. "The survival of our model of society, based on the preservation of individual and collective freedoms and rights, depends on it."

In August, the United States and France announced a commitment on the fiscal issue. Under the agreement, the United States would temporarily refrain from imposing new commercial retaliatory measures on French products in relation to the digital services tax. That moratorium expired last week.

Meanwhile, France said it would reimburse US companies for the difference in taxes between what it will collect and what the companies will have to pay under a comprehensive tax plan that is being developed in the Organization for Economic Cooperation and Development. Those discussions are still ongoing.

Saskya Vandoorne contributed to this report.

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