France is facing even bigger tariffs - up to 100% - after the Office of the US Trade Representative stated France’s new digital services tax discriminates against US companies (Google, Amazon and Facebook).

By Ian Horswill


Posted on December 3, 2019

US President Donald Trump has imposed metal tariffs on South American countries Brazil and Argentina and is proposing massive tariffs on up to US$2.4 billion worth of imports from France.

The US exempted Brazil, Argentina and other countries from Donald Trump’s sweeping metal tariffs in March 2018, with the US stating it would continue negotiations with those countries to improve their trade terms. In May 2018, the US announced it had reached an agreement with Brazil and Argentina that would cap their metal shipments at a specific volume each year.

Trump has now accused Brazil and Argentina of deliberately devaluing their currencies, which he claimed was not good for US farmers, and is imposing tariffs on metal imports.

An economist dismissed Trump’s reason for imposing the tariffs.

“I don’t think this has a whole lot to do with steel; this is a China issue,” Fernando Cutz, a Western Hemisphere expert at The Cohen Group, told the Washington Post. “If USTR wants to maximise a trade deal with China, they need to put pressure on China. But if China figures out how to replace the US markets with Brazil and Argentina, that’s not creating pressure.”

As China rolled back purchases of US agricultural products over the past year, they have bought pork, soybeans, and more goods from other countries.

Brazil has been a big winner from the trade war, particularly its soybean farmers. According to a US Department of Agriculture report released earlier this year, Brazil’s share of the Chinese soybean market surged to 77% in a period ending this February. In stark contrast the US saw its marketshare fall to 4% this year from around 30% in 2018.

France is facing even bigger tariffs – up to 100% – after the Office of the US Trade Representative stated France’s new digital services tax discriminates against US companies (Google, Amazon and Facebook). The trade office will accept public comments on the tariffs on goods including Roquefort cheese, handbags, lipstick and sparkling wine, which could hit 100%.

The French tax is designed to prevent tech companies from dodging taxes by putting headquarters in low-tax European Union countries. It imposes a 3% annual levy on French revenues of digital companies with yearly global sales worth more than 750 million euros (US$830 million) and French revenue exceeding 25 million euros.