Early last year, United States President Donald Trump placed a tariff on all incoming washing machines and solar panels. Shortly thereafter, two more tariffs were levied on all incoming steel and aluminum, much of which came from China. The People’s Republic of China took offense to these tariffs and threatened tariffs of their own. What followed was a back-and-forth volley of tariffs placed directly on one another’s exports between the United States and China, which is now recognized as an ongoing trade war between the two countries.
For nearly the past two years, it seemed as if these tariffs would stay between the two countries, which happen to be the two most powerful nations in terms of sheer economic power in the world – China is ranked second in terms of nominal gross domestic product (GDP), with United States taking first place, whereas the two nation’s places are switched when GDP is measured in terms of purchasing power parity. So, it seemed fitting to restrict the scope of their trade war to one another.
However, after France came out with a new tax on digital services, the bulk of which comes from the United States, President Donald Trump noted just yesterday, on Monday, Dec. 2, 2019, that the United States government was planning on potentially welcoming tariffs on some $2.4 billion of French imports, including things like cheese, champagne, fine handbags, and more.
A few of the companies that would be most affected by France’s digital services tax are Amazon, Facebook, Google, and Apple, all of which are located in the United States, more specifically in Central California’s Silicon Valley, found in the San Francisco Bay Area.
The office of the United States Trade Representative, led by Robert Lighthizer, claimed yesterday that France’s digital services tax is not in line with other countries’ tax policies on an international level, which places a significant and unusual burden on American companies affected by the tax. Currently, Lighthizer plans on looking into recently-enacted digital services taxes in the likes of Italy, Austria, and Turkey.
Public comments on this matter will be collected from now until Jan. 14 regarding its proposed list of items to be hit with tariffs and on whether or not the American people believe that similar taxes should be levied on France’s digital services of export to the United States. A public hearing for this issue will take place on Jan. 7, 2020.