EU to respond 'as one' on US tariff threat against France, Others: spokesman

Plans to hit France with $2.4 billion tariffs on champagne and luxury handbags intact.

US warns Austria, Italy, Turkey they could face action over digital tax

President of the United States Donald Trump vows to hit France with $2.4 billion tariffs on champagne and luxury handbags in retaliation for 'digital tax' on Google, Amazon and Facebook in move revealed hours before he meets President Macron in London's NATO summit.

The EU will answer tariff threats by the United States against France "as one" and urged Washington to engage in dialogue, an EU spokesman said on Tuesday. According to an AFP report.

"As in all other trade-related matters the EU will act and react as one and it will remain united," said EU Commission spokesman Daniel Rosario after the US threatened tariffs on French goods on Monday.

United States also warns Austria, Italy, Turkey they could face action over digital tax

The EU Commission, which handles trade matters for the EU''s 28 member states, was "coordinating closely with the French authorities on next steps", Rosario said.

He also encouraged dialogue, noting that Washington had left several options open including taking the fight to the World Trade Organization in Geneva.

"We remain of the view that the WTO is the place to address any trade dispute (so) the EU will therefore seek immediate discussion with the US on how to solve this issue," Rosario told reporters.

The EU insisted it remained committed to finding a global agreement on taxing the digital economy, the issue that is at the heart of the US row with France.

"We are working hard with our partners to achieve that and are encouraged by the progress being made," he said.

The Organisation for Economic Cooperation and Development (OECD) has put forward initial proposals for a "unified approach" to taxing big tech worldwide in the hope of reaching an agreement next year.

The Trump's meeting with Emmanuel Macron scheduled for Tuesday morning on the sidelines of the NATO summit in London while the US Government on Monday threatened to impose tariffs of up to 100 percent on $2.4 billion in French goods in retaliation for a digital services tax it says is discriminatory.

French sparkling wine, yogurt and Roquefort cheese are on the list of goods that could be targeted as soon as mid-January after a report from the US Trade Representative's office found the tax penalizes American tech companies such as Google, Apple, Facebook and Amazon.

The decision 'sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies,' US Trade Representative Robert Lighthizer said in a statement.

Lighthizer also warned that Washington was considering widening the investigation to look into similar taxes in Austria, Italy, and Turkey.

'The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets US companies, whether through digital services taxes or other efforts that target leading US digital services companies.'

The French tax, enacted earlier this year, imposes a three percent levy on the revenues earned by technology firms in France, which often come from online advertising and other digital services.

The tax affects companies with least 750 million euros ($830 million) in annual global revenue on their digital activities.

The French tax targets revenue instead of profits, which are often reported by tech giants in low-tax jurisdictions like Ireland in a practice that has enraged governments.

The USTR report 'concluded that France's Digital Services Tax (DST) discriminates against US companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected US companies.'

After the tax was enacted, Trump in July vowed 'substantial' retaliation for the French measure.

USTR has scheduled public hearings on the proposal to imposes 'duties of up to 100 percent on certain French products,' and the possibility of 'imposing fees or restrictions on French services.'

The last date to submit comments on the proposed actions is January 14, and 'USTR expects to proceed expeditiously thereafter.'

The list of French products subject to potential duties includes cosmetics, porcelain, soap, handbags, butter, and several kinds of cheeses, including Roquefort and Gruyere.

However, despite Trump's repeated threats to retaliate against French wines, only sparkling wine made the tariff list.

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