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Macron, Trump continue to spar over French digital tax plans and retaliatory US tariffs

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French President Emmanuel Macron and his US counterpart Donald Trump on Tuesday appeared unwilling to lay down their arms in an escalating spat over Pariss plans for a special tax on digital service companies and Washingtons threat to retaliate with massive tariffs on French imports.

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The United States on Monday threatened to impose duties of up to 100 percent on imports of champagne, handbags and other French products worth $2.4 billion after a US government investigation found that Frances new digital services tax would harm US technology companies such as Google, Apple, Facebook and Amazon.

In London for a NATO summit, Trump and Macron exchanged a tight-gripped handshake before both said they hoped they could smooth out their differences over the increasingly inflammatory issue.

But neither seemed particularly willing to back down on their respective threats.

“Theyre American companies. Theyre tech companies. Theyre not my favourite people, but thats OK, I dont care, theyre American companies. And we want to tax American companies. Its not for somebody else to tax them,” Trump said, acknowledging a “minor dispute” between the two leaders.

“So its either gonna work out, or well work out some mutually beneficial tax,” he said, referring to the levy threat. “And the tax will be substantial. Im not sure its gonna come to that, but it might.”

Macron, meanwhile, said that while he hopes to “settle this situation with President Trump”, he remains “determined to defend the interests of our country and of Europe”.

The spat marks a new low in testy relations between Trump and Macron, who have been at odds over the American president's unilateralist approach to trade, climate change and Iran.

The United States has already imposed 25 percent duties on French wine and cheese as part of its WTO-sanctioned response to illegal EU aircraft subsidies, a move exporters said would penalise US consumers while severely hurting French producers.

International solution

Frances 3 percent levy applies to revenue from digital services earned by companies with more than €25 million of revenues from France and €750 million worldwide.

An investigation by the US Trade Representatives office found the French tax was “inconsistent with prevailing principles of international tax policy” and that it was “unusually bRead More – Source

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