Tech, Taxes, Tariffs, Trade — And French Wine
France has imposed/threatened a “digital services tax” on the likes of Amazon, Apple, Facebook, and Google — all American companies.
The tax is 3% of gross revenues from digital services earned in France, but only for companies with more than 25MM Euros in French revenue and 750MM Euros in worldwide gross revenue. The tax money goes to France.
When you work through the math it puts a bullseye on Amazon, Apple, Facebook, and Google while giving a pass to many European companies who collectively are just as big as these digital behemoths. This is not an accident.
This tax was discussed for some time period, but its enactment caught a lot of folks by surprise. One who was not caught by surprise was President Donald J Trump.
President Trump had spoken to the French President Emmanuel Macron cautioning him that such a tax would be met with an American response.
President Trump, in his inimitable fashion said, “Don’t do it because if you do it, I’m going to tax your wine.” Macron blew him off. French wine is a huge industry.
The French Finance Minister, Bruno Le Maire, sniffing at the ruffian DJ Trump, suggested that taxes and tariffs were completely unrelated. Good luck with that, Bruno.
Taxes and tariffs are core elements of trade while technology, digital services are a critical element of American commerce.