USTR Eyes Additional Duties on France Over Digital Services Tax

The Office of the U.S. Trade Representative is eyeing additional duties on French products over France’s digital services tax. After determining in December the DST "is unreasonable or discriminatory and burdens or restricts U.S. commerce," USTR said Friday it plans the additional duties of 25%; it will suspend those levies' application for up to six months.

France's 3% tax is expected to have collections of about $450 million from U.S. companies for activities in 2020, and $500 million-plus next year, USTR said. "Additional duties of 25 percent on the products of France covered by the trade action should result in the collection of tariffs on goods of France at comparable, though somewhat lower amounts." It listed makeup and other beauty products and handbags.

“Today’s action sends a strong message that discriminatory taxes aimed at US companies are not a path to modernizing the global tax system," said Computer & Communications Industry Association President Matt Schruers Friday. "Changes to international tax rules must be negotiated in good faith through a consensus-based approach at the OECD that addresses the changes of the digitalized global economy.”

France's embassy in Washington didn't comment right away. USTR didn't answer our questions right away, either.