US threatens EU with auto tariff against any 'arbitrary' digital tax: Mnuchin

United States will impose fresh tariffs on EU member states, Italy and Britain if they move forward with plans to tax technology companies like Google and Facebook, Treasury Secretary Steven Mnuchin said Tuesday. 

Speaking on the sidelines of the World Economic Forum in Davos, Mnuchin urged Italy and Britain to reverse digital services taxes that were separately set to take effect in the two nations this year. The Trump administration argues such taxes discriminate against Silicon Valley and are inconsistent with international tax policy.

"If not they'll find themselves faced with President Trump's tariffs," Mnuchin told The Wall Street Journal in an interview. "We'll be having similar conversations with them."

The warning came a day after the US reached a truce with France over a 3% digital services tax that was passed last year, applying to companies with global revenue of at least 750 million euros and digital sales of at least 25 million euros. France is expected to temporarily pause that tax while the two countries negotiate a broader agreement.

In return, President Donald Trump will suspend threatened tariffs of up to 100% on $2.4 billion worth of products such as wine and cheese. While those tariffs were meant to penalize France, they would have also raised prices for US businesses and consumers.

"We had a very good conversation. It worked out very well," Trump said following a meeting with French President Emmanuel Macron at the WEF. "The US is very happy with the result, and we appreciate very much what President Macron did."

Other European countries have separately announced plans to crack down on big tech, saying the sector avoids taxes by building subsidiaries in other countries.

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