Tariffs on French Handbags, Cosmetics Could Begin, Wyden Warns
After France began sending collection notices to internet companies last week for its new Digital Service Tax, according to a report in Financial Times, the U.S. and France seem headed for a collision course on taxes and tariffs. The Office of the U.S. Trade Representative has identified $1.3 billion worth of imports -- primarily handbags and cosmetics -- that would be hit with a 25% tariff, but delayed collecting them since France also delayed implementing the DST (see 2007130043).
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After the news that France is going ahead, Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said by email that “France’s decision to collect a discriminatory digital services tax next month represents an escalation against American employers and leave more U.S. industries open to unfair foreign taxes. France, and all countries considering DSTs, should abandon these unilateral measures, and focus their energies on the OECD’s multilateral process to reach a fair negotiated agreement. Otherwise the U.S. will have no choice but to use every available tool to defend against these predatory taxes.”