France and the United States have decided to give themselves 15 more days to try to resolve the conflict around the Google rate gala that threatens to break trade relations between the two countries. This was at least announced on Tuesday by the French Minister of Economy, Bruno Le Maire, who has indicated that he hopes that, during this new period of negotiations, the US will stop its threat of imposing new tariffs on French products in retaliation for pricing on digital platforms. Washington considers this measure an attack on the North American technology giants, an extreme that Paris denies taxatively, although so far without much success.
“We have agreed to redouble our efforts in the coming days to try to find a compromise on digital pricing under the OECD“Le Maire said about his” long conversation “, the day before, with the US Secretary of the Treasury, Steven Mnuchin.” We have given ourselves exactly 15 days, that is, until our next interview, scheduled on the margins of Davos, at the end of January, ”added Le Maire after meeting in Paris with the European Commerce Commissioner, Phil Hogan.
The European representative travels next week to Washington, where he plans to meet with the Secretary of Commerce, Robert Lighthizer. In Paris, Hogan reiterated Brussels’s support for Paris in its pulse for the digital rate against Washington and said that, if negotiations are thwarted, “we will analyze all the possibilities if the US imposes tariffs on France. “The European Commission will support France and other countries that want to have the sovereign right to impose fees on digital companies fairly, ”he added.
It is not a bilateral battle between Paris and Washington, said Le Maire. “France has the support of the EU and many European countries that have also decided to impose digital fees, so if the US punishes France, tomorrow it must also punish Italy, Austria or Great Britain and we will enter into a commercial conflict between the US UU and Europe ”, he warned. “Does anyone want that? We want to avoid this climbing logic, ”he added.
Trade relations between Paris and Washington are tense since France approved last year the imposition of a tax of about 3% on the turnover of technology companies in France, which usually comes from digital advertising and the sale of data for purposes advertising The tax affects companies that earn annual revenues of at least 750 million euros (about 830 million dollars) in their global digital activities.
The US considers that it is a tax that punishes North American companies, an extreme that France has always denied. Both countries agreed during the summit of G7 held last August in Biarritz that France will reimburse affected companies for the difference between the gala rate, which is applied retroactively since early 2019, and the new international appraisal system that the Organization for Economic Cooperation and Development (OECD) is preparing to tax these companies that billionaires do business in countries where they are not physically present, and that the Paris-based agency must present this year.
However, the tension skyrocketed again in December, when the US government announced the introduction of a tariff of up to 100% on imported French products, such as wine, worth 2.4 billion dollars, in retaliation for the Google rate that Paris plans. The consultation period to establish a definitive tariff for each product proposed by Washington – cheeses, sparkling wine, perfumes, bags, yogurt, butter, beauty items, makeup, manicure and pedicure, soaps and porcelain – closed on Monday. Hence the conversation between the two governments, which, according to the French version, has resulted in a new two-week negotiation period.
Le Maire, who qualified the North American tariff project “unfriendly, inappropriate and illegitimate,” he stressed that while the talks last “there can be no US sanctions”, because “that would be the end of discussions and the end of negotiations” and would automatically lead to a new escalation of the conflict. “If there are sanctions, we will go to the WTO. We are ready to react and I am pleased to know that we have the full support of the European Comission”, Stressed the minister, who insisted that the conflict should try to be resolved within the OECD, although he did not rule out“ other ”options.
“The French will remains to find an international agreement in the OECD and, as soon as there is, we will replace our appraisal ”with the international one, Le Maire insisted. But although the OECD is the “reference option” of Paris, “if it is not possible, we will work on other possibilities,” he added without giving further details.