US ‘threats’ not way to solve digital tax law dispute: French minister

by AFP/ pic by AFP

France on Thursday rejected a US investigation into its plans to tax internet giants which could trigger punitive tariffs, saying “threats” were not the way to resolve disputes.

“Between allies, I believe we can and must resolve our differences in another way than through threats,” Economy Minister Bruno le Maire (picture) told the French Senate ahead of a vote.

If the law is passed, as expected, France will become the first major economy to impose a tax on internet heavyweights.

Dubbed the GAFA tax – an acronym for Google, Apple, Facebook and Amazon – the legislation will impose a levy of 3.0 percent on total annual revenues of the largest tech firms providing services to French consumers.

Le Maire said he was warned about the so-called Section 301 investigation during a “long conversation” with US Treasury Secretary Steven Mnuchin on Wednesday.

“It is the first time in the history of the relationship between the United States and France that the US administration has decided to open a procedure under Section 301,” he said.

This type of investigation is the primary tool the Trump administration has used in the trade war with China to justify tariffs against what the United States says are unfair trade practices.