Washington announced the introduction of 25% duties on a number of goods from France. New tariffs will apply to makeup and skin care cosmetics, soaps and bags. Increased duties will affect imports totaling $ 1.3 billion.
Fees will come into effect on January 6, 2021, a delay is provided for the parties to be able to negotiate and come to a compromise during this time.
“The US Trade Representative has decided to take measures in the form of an additional fee of 25 percent on French products listed in Appendix A,” the statement said the United States Trade Representative, USTR.
- U.S. Sales Representative Robert Lighthizer
- © Anna Moneymaker / Pool via REUTERS
Thus, the Donald Trump administration reacted to last year’s decision of Paris to tax 3% of the turnover of the largest IT companies that provide their services in French territory. This step of the French authorities affects the interests of such American giants as Google, Apple, Facebook and Amazon.
The decision of the French side provoked Washington's protest. The Office of the US Trade Representative has discriminated against the digital tax imposed by the Fifth Republic and other European countries. As the US Trade Representative, Robert Lightheiser, emphasized that the United States will take measures against countries that have a tax that "discriminates or otherwise unreasonably burdens American companies."
“The management is focused on countering the growing protectionism in EU member states, unfairly directed against American companies and taking the form of taxes on digital services or other efforts aimed at the largest US digital service providers,” Lighthizer emphasized then.
“An impressive package of measures”
According to Donald Trump, only the US government can tax American companies. The head of the White House wrote about this in July last year on his Twitter, threatening to introduce increased duties on imports of French wines.
“In the near future we will announce an impressive package of responses to Macron’s stupid act. I have always said that American wine is better than French! ”Said the American leader.
France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron's foolishness shortly. I've always said American wine is better than French wine!- Donald J. Trump (@realDonaldTrump) July 26, 2019
However, wines were not included in the final list of goods subject to increased duties. Cheeses that were originally featured in the preliminary list of goods published in December 2019 by the Office of the US Trade Representative were not included in it. The volume of French imports falling under the new tariffs was also reduced - last year the US authorities planned to levy increased duties on supplies worth $ 2.4 billion.
Paris has not yet commented on Washington’s decision to impose additional import duties on French goods. However, in January 2020, French Minister of Economics and Finance Bruno Le Mayor announced the government’s readiness to impose sanctions in response to such U.S. actions.
- © Eric Gaillard
“The US administration claims that our taxes discriminate against them. I categorically deny this and have already sent a letter to Robert Lightheiser, US sales representative, ”said Bruno Le Mayor in an interview with Le Journal du Dimanche.
The minister added that Paris wants to avoid a trade war, but is ready to retaliate against "unfriendly and illegal" sanctions.
As an expert at the International Institute for Humanitarian and Political Research Vladimir Bruter explained in an interview with RT, the current situation with American IT companies that work abroad but pay taxes only at home has bothered many countries.
“The point is to force American companies to at least partially pay taxes in the countries where they operate. But US authorities are categorically against this idea. There is no need to speak of justice here, since the USA independently interpret the rules of international trade in its favor, ”the expert noted.
According to Vladimir Bruther, Paris does not intend to refuse the digital tax, despite the indignation of Washington, as the French budget today is in dire need of additional revenue.
“Most likely, a compromise will be sought already at the level of the European Union. Undoubtedly, the negotiations will be difficult, and it is not yet clear what they can lead to, ”the expert said.
According to analysts, trade controversy has complemented the political divisions that exist in US-French relations.
“It is known that the United States is waging trade wars with almost everyone, trying in this way to change the balance of payments for the better for itself. And we are talking about both commodity trading and other areas. This all fits into the concept of Trump, according to which the United States should be the undisputed world leader, ”said Alexei Kuznetsov, deputy director of IMEMO RAS, in a commentary on RT.
As the expert explained, now Europe is forced to face US monopoly in a number of areas.
“The situation with the digital tax and US duties has become another episode of the discord between Europeans and Americans,” the expert added.
A similar point of view is shared by Vladimir Bruter. In his opinion, the current contradictions in the US-French relations are based on the conviction of the American leadership that all countries must agree with the position of the United States.
“This is Washington’s principled position, it plays even a larger role than the protectionist and isolationist elements in Trump’s politics,” the expert noted.
Defense and Politics
Recall that in November 2019, French President Emmanuel Macron gave an interview to The Economist, in which he criticized not only US policy, but also talked about the deplorable situation of the North Atlantic Alliance as a whole.
“In view of the impermanence of our American partner and the growing tension, the idea of creating a European security mechanism is gradually being strengthened ... I would add that at some point we will have to reconsider the expediency of NATO,” Macron said then. “It seems to me that NATO’s brain is dying.” We need to soberly assess the situation. ”
According to the French president, today Europe faces two key tasks: gaining autonomy in the security sphere, as well as resuming a strategic dialogue with Russia.
- Emmanuel Macron
- © Kay Nietfeld / Pool via REUTERS
In turn, commenting on the words of the French leader, the head of the White House noted that France needs NATO "like no other."
“And, frankly, the United States is the one that receives the least benefit from the alliance. We help Europe, ”Trump said.
However, in Paris, they believe that Washington acts exclusively in its own interests. For example, it imposes contracts on the supply of American arms to European partners. As French Defense Minister Florence Parley said in March 2019, she is worried about the idea that "the strength of solidarity in NATO can be made dependent on the purchase of this or that equipment."
The minister added that the article of the charter of the Alliance on solidarity is called “article five, not article F-35”. Thus, the head of the French defense department recalled the supply of new-generation F-35 American fighter jets to NATO member countries.
According to Vladimir Bruter, Washington is not ready to listen to the growing discontent of Paris, as the American leadership is convinced that France will remain committed to transatlantic relations in any case.
“Trump is confident that France will return“ under the wing ”of the United States, despite all the statements of the French leadership. But in fact, the differences will grow, at least as long as Trump remains in power in the US, ”the expert noted.
A similar point of view is shared by Alexei Kuznetsov. According to the expert, the root of all European-American contradictions lies in the economic field, even in cases where leaders talk about defense policy.
“Initially, discontent in Europe began to grow after Trump began to demand from European partners to increase defense spending. It was, in fact, an economic demand that led to political repercussions. And how the US-European relations will develop further, largely depends on the outcome of the US presidential election, ”the expert summed up.