Hoping to buy a nice bottle of French wine? Doug Palmer of Poltico has some bad news for you:
The Trump administration announced Friday a 25 percent tariff on $1.3 billion worth of French handbags, cosmetics and soaps in retaliation for a digital services tax on U.S. internet giants, but said it would suspend imposing them for up to six months. The United States believes the way the French tax is structured unfairly targets large U.S. internet companies like Facebook, Google and Amazon. However, other countries are increasingly determined to find a way to collect revenue from firms that earn billions of dollars in their markets.
Let’s note that Amazon, Facebook, and Google made yuuuuge profits and evade U.S. corporate profits taxes. So paying a modest excise tax on European sales is not exactly going to bankrupt these tax cheats. But back to the story:
U.S. Trade Representative Robert Lighthizer’s office concluded last year that France’s digital service tax was unreasonable, discriminatory and a burden on U.S. commerce. It also laid out a list of $2.4 billion worth of French goods — including Champagne, cheeses, handbags, soaps and fine dinnerware — that could be hit with retaliatory duties as high as 100 percent. U.S. trade officials said the final retaliation figure announced Friday reflects the value of U.S. digital transactions covered by France’s 3 percent digital services tax, which is estimated to be in the range of $15 billion per year, and the amount of taxes that France is expected to collect from U.S. companies.
If collecting tax revenues were the goal, the U.S. could make much more from Amazon, Facebook, and Google by simply enforcing the transfer pricing rules. Oh but that would be taxing rich people which is not the Republican way. Back to the story:
Donald’s a real big picture guy.