90 Miles From Tyranny : French President Macron Blinks, Backs Down in Trade Dispute With President Trump

Wednesday, January 22, 2020

French President Macron Blinks, Backs Down in Trade Dispute With President Trump

French President Macron blinked and backed down in a dispute with President Trump and the United States over a digital tax that unfairly targets American technology companies:

“French President Emmanuel Macron said on Monday he had a “great discussion” with President Donald Trump over a digital tax planned by Paris and said the two countries would work together to avoid a rise in tariffs.

Great discussion with @realDonaldTrump on digital tax. We will work together on a good agreement to avoid tariff escalation.
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The two leaders agreed to the truce after Paris offered to suspend down payments for this year’s digital tax and Washington promised to keep negotiating towards a solution rather than acting on a tariff threat, French sources said.

Specifically, Macron and Trump agreed to hold off on a potential tariff war until the end of 2020, a French diplomatic source said, and to push ahead with broader negotiations at the Organization for Economic Cooperation and Development to rewrite the rules of international taxation during that period.

“They agreed to give a chance to negotiations until the end of the year,” the source said. “During that time period, there won’t be successive tariffs.”

France decided in July to apply a 3% levy on revenue from digital services earned in France by companies with revenues of more than 25 million euros ($28 million) in France and 750 million euros worldwide.

Washington threatened to impose trade tariffs on French Champagne, handbags and other goods in response. It complained the tax unfairly targeted U.S. internet companies, a claim Paris dismissed.

French authorities have repeatedly said any international agreement on digital taxation reached within the OECD would immediately supersede the French tax.

But concerned that the United States would snub the OECD negotiations and proceed with tariffs on French goods, France has offered to suspend until the end of the year down payments on its digital tax that would have been due in April.

“What we’re proposing is to give ourselves time and to show our goodwill, to postpone the remaining payments to...

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