US Trade Representative suspends tariffs on French goods
- The tariffs proposed by the US had a value of $1.3 billion
- This was in response to France imposing taxes on US based tech companies
- The negotiations are underway through the OECD
The US Trade Representative Robert Lighthizer said that the US government has decided to abandon the plan of imposing new tariffs worth $1.3 billion on French products after a conflict on digital services tax, AFP reported.
The US Trade Representative stopped the transaction which was supposed to take effect on Wednesday and cited unfinished investigations of similar measures “adopted or under consideration in 10 other jurisdictions.”
In July 2020, the US government broadcasted its decision of imposing 25% tariffs on products like cosmetics, handbags and other personal care items from France. However, the collection of duties on such French products were suspended until January 6.
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This was done in response to a tax imposition approved by the French authorities on US tech-based organisations like Google, Facebook, Apple and Amazon. These organisations were also accused of transferring their profits offshore, AFP reported.
Lighthizer said that the tax targets US tech-based companies.
As the Fench and American sides have been negotiating using the platform of the Organisation for Economic Co-operation and Development, France suspended the digital service tax collection before 2020 ended.
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The negotiations aim to find a common ground and solve the issue of tax profits being earned in one country and managed in the other, AFP reported.
However, the negotiations were roadblocked by the COVID-19 pandemic while other countries follow the footsteps of France.
On Wednesday, the USTR also condemned similar acts by countries like Turkey, Italy and India but did not impose any tariffs.
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