By Josh Zumbrun 

WASHINGTON -- The Trump administration said it would put tariffs on $1.3 billion of French imports if Paris doesn't back down from plans to impose a new digital-services tax that would fall heavily on U.S. technology companies.

The Office of the U.S. Trade Representative said the proposed tariffs on certain cosmetics and handbags wouldn't take effect until Jan. 6, 2021, which gives time for both sides to negotiate a settlement.

The USTR said in a filing Friday that the tariffs would be set at a rate of 25%. The administration had previously considered a wider range of goods for the tariffs, including wines and cheeses, that were left off the final list announced Friday. The administration had also said the tariffs could be as high as 100%.

The tariffs are being imposed after a USTR investigation concluded that France's digital services tax was designed to discriminate against U.S. digital companies. French legislators had called the proposal a "GAFA tax" because it would fall heavily on Google, Apple, Facebook and Amazon.

France passed the tax last year, but agreed to suspend collection at least until later this year while countries are working on an international agreement that would standardize how to tax internet-based commerce.

Lawmakers and tech companies have supported the administration's efforts to get France and others to dial back the digital tax proposals.

"Retaliatory tariffs aren't ideal but the French government's refusal to back down from its unilateral imposition of unfair and punitive taxes on U.S. companies leaves our government with no choice," said a statement from Sens. Chuck Grassley (R., Iowa) and Ron Wyden (D., Ore.), the chairman and ranking member respectively of the Senate committee with oversight of taxation.

The French embassy didn't immediately return a request for comment Friday night.

France has said it also favored an international framework for digital taxes, but was prepared to move forward with the tax if no agreement were reached. French officials have said the threat of tariffs was unjustified and that the U.S. was the party preventing an international consensus from being reached on the issue.

Countries have been negotiating an international standard for taxing digital services via talks at the Organization for Economic Cooperation and Development, a group of 37 advanced economies. The French finance minister said in June that the talks were "within a few centimeters of an accord" but U.S. Treasury Secretary Steven Mnuchin said they were at an impasse.

The action is part of a widening fight between the U.S. and countries proposing digital-services taxes. Because the most successful global technology companies are the American tech giants, many of the proposals heavily affect American companies.

Last month, the USTR also formally initiated a process that could lead to tariffs against imports from a number of countries that are considering digital- services taxes of their own. The USTR opened investigations against such measures from the European Union, as well as national proposals from Austria, Brazil, the Czech Republic, India, Indonesia, Italy, Spain, Turkey and the U.K.

Write to Josh Zumbrun at


(END) Dow Jones Newswires

July 10, 2020 19:01 ET (23:01 GMT)

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