France says it will approach the World Trade Organization to challenge the U.S imposed punitive tariffs

Following an announcement in July that France plans on imposing a tax on digital companies, President Trump had threatened to retaliate with punitive tariffs on Champagne and other French products. As per the sources, the U.S threat wasn’t well-received on France’s end that declared on Sunday that it intends to approach the World Trade Organization to appeal against the U.S.

French Finance Minister Says Tax On Digital Companies Is Not Discriminatory

According to the French Finance Minister, Bruno Le Maire, French tax on digital companies is not discriminatory as its effect on all companies is identical regardless of whether the company belongs to the U.S, France, Germany, China, or any other country across the globe. Maire also highlighted that France has reiterated on multiple occasions that the U.S based digital companies are earning sufficient revenues in France while paying peanuts in terms of taxes.

The French government had announced in July that moving forward, a 3% tax will be applicable on all digital companies with a revenue of 25 million euros in France and 750 million euros in total. The companies will be legally bound to paying the newly introduced tax. While the tax was announced in July, it was implemented retroactively from January 2019.

The White House had responded with a threat of imposing punitive tariffs on French products like champagne, luxury handbags, and cheese. Recently, however, the European Union extended its support to France, stating that the EU in collaboration with France will retaliate fiercely if Trump Administration chooses to act on its threat.

The French Finance Minister further highlighted that France is willing to hold discussions at the Organization for Economic Cooperation and Development (OECD) with the United States regarding a global digital tax. He, however, cleared his stance that the recently introduced tax on digital companies will no longer be optional.  

French Finance Minister Wants To Discuss A Global Digital Tax At The OECD

Maire expressed a desire to sign a global digital tax agreement at the OECD. Conversely, he stated, a lack of agreement will see France restarting the discussions at the EU level.

Previously, under the former European Commission executive, opposition from Sweden, Denmark, Finland, and Ireland, had led to a failure of the proposed global digital tax agreement. With Paolo Gentiloni taking over the European Commission on December 1^st, France now plans on pushing its proposal for a global digital tax again.

Washington’s recent trade wars with China and the European Union have weighed on the global financial markets in the past months. Adding France to the list, analysts are expecting a considerable impact on the global stocks in the upcoming weeks, if the tension is stretched any further.