France's government said the European Union would retaliate if the U.S. follows through on a threat to hit about $2.4 billion of French products with tariffs over a dispute concerning how large tech companies are taxed.
The decision by the office of the U.S. Trade Representative marks a setback for efforts to stop a conflict over a digital services tax. The levy, which the USTR says "discriminates against U.S. companies," would hit the revenues of large tech companies including Google, Apple, Facebook and Amazon.com.
The American tariffs in response could target sparkling wine, cheeses, handbags and makeup.
"It's not worthy of an ally, and it's not the behavior we expect from the U.S. toward one of its main allies, France, and more generally, Europe," French Finance Minister Bruno Le Maire said Tuesday. "If there were new U.S. sanctions, the E.U. would be ready to retaliate."
Speaking in London, President Donald Trump said it's not for France to tax U.S. businesses.
"They're American companies," Trump said, referring to Facebook, Google and Twitter. "If they're going to be taxed, the U.S. will tax them."
Le Maire told reporters in France that the solution isn't nonstop retaliation and sanctions, because that is "bad for our political relationship and growth and the economic recovery everywhere in the world."
"We are ready to withdraw the French national tax as soon as there is a solution and there is a solution at the OECD level," he said.
