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EU will 'respond in kind' if US imposes tariffs on France over digital tax

Megan Henney

The European Union vowed to “respond in kind” if President Trump imposes tariffs on France over a new tax law that takes aim at U.S. tech giants like Amazon and Google.

Speaking at a press conference during the G-7 summit in Biarritz, France on Saturday, President of the European Council Donald Tusk said the 28-member body is prepared to stand by France if Trump moves forward with his threat to slap an import duty on French wines.

“I will protect French wine with genuine determination for many reasons,” Tusk said, adding, “The EU stands by France. If the U.S. imposes tariffs on France, the EU will respond in kind.”

At the end of July, French President Emmanuel Macron signed the digital services tax, a 3 percent tax that targets companies worth at least 750 million euros ($834 million) globally and 25 million euros in France. It will be retroactively applied from early 2019 and is expected to generate up to 400 million euros per year.

The move sparked ire from the Trump administration, which suggested it “unfairly” targeted the U.S.

U.S. Trade Representative Robert Lighthizer said an investigation would "determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce."

Because France is part of the EU, it’s unclear how Trump could specifically target the country without ensnaring the entire bloc.

Trump arrived in France early Saturday morning for a sit-down meeting with Macron. Neither addressed the tech tax or tariffs.

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