The NATO summit planned for this week in London is not exactly off to a great start. The office of U.S. Trade Representative (USTR) Robert Lighthizer has revealed that the U.S. is preparing massive tariffs on large quantities of French goods in retaliation for a tax on technology companies that the U.S. claims unfairly targets American companies. The tariffs that Lighthizer unveiled in response cover $2.4 billion worth of prominent French goods like cheese and wine and in some cases reach as high as 100 percent, which would essentially double prices. That’s going to hurt U.S. businesses as quickly as it could curtail sales of French goods in the U.S.
‘USTR’s decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies… The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies, whether through digital services taxes or other efforts that target leading U.S. digital services companies.’
The irony here is that the Trump administration has contorted itself in attempts to protect American businesses, even those — like coal — that have been on the downswing thanks to barely unwindable economic developments. They’ve imposed harsh tariffs on imports of steel and aluminum from around the world, seeking to punish businesses that dare do business outside of the United States. Now, when it suits them politically, they’ve flipped — right before Trump is scheduled to meet one-on-one with French President Emmanuel Macron at the NATO summit, which marks the alliance’s 70th anniversary.
In this France debacle, big tech companies — which in some cases, like that of Facebook and its founder Mark Zuckerberg, have freely launched into allowing the promotion of far right content in the name of “free speech” or whatever — lauded the decision.
The Internet Association’s trade policy director Jordan Hass insisted:
‘Today USTR is defending the internet, which is a great American export. Discriminatory digital services taxes act as a trade barrier for innovative American companies and small businesses often face the biggest burden from them.’
So the best that anyone can come up with is to penalize other American small businesses? If the planned tariffs go into effect — public comment is due in early January and a hearing will be held right after that — any small business that relies on French goods could face going under. Besides — the French tax doesn’t even target small businesses! POLITICO notes that their “3 percent levy applies to companies with more than 25 million euros in digital services revenue in France and 750 million euros ($825 million) worldwide.” That’s not exactly small — it’s companies like Google, Amazon, Facebook, and so on.
Previously, the Trump administration has refused to admit that Americans pay anything under tariff regimes, but they do! When they’re the ones doing the importing, they’re the ones paying the import taxes. In other words, the newly announced tariff plans aren’t just a stick in the wheels of international relations. They’re also a tax hike on Americans.