French senators are set to vote Thursday on the tax.
By Aaron Lorenzo |
The Trump administration will probe whether France’s planned “digital services” tax is an unfair trade practice that targets U.S. tech giants, a warning shot that could eventually result in tariffs or other retaliatory measures.
“The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce,” U.S. Trade Representative Robert Lighthizer said in a statement Wednesday.
The dispute has been simmering for months as France and other countries contemplate taxes on services offered by Google, Facebook, Amazon and other companies.
“The services covered are ones where U.S. firms are global leaders,” the USTR’s office said. “The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain U.S.-based technology companies.
French senators are set to vote Thursday on the tax, which would hit tech firms’ French revenues with a 3 percent tax if their worldwide revenue exceeds 750 million euros, roughly $840 million, or 25 million euros in France, about $28 million.