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US targets French luxury, beauty giants in tariff retaliation
THE US is set to go after beauty and luxury companies in France after President Emmanuel Macron's government said it plans to tax the Silicon Valley tech giants.
A list of imports from France worth Us$1.3 billion will be subject to an additional 25 per cent tariff if both nations fail to reach an agreement. The list includes beauty products like lip and eye makeup preparations as well as handbags with an "outer surface of reptile leather," the US said in a statement on the US Trade Representative's website on July 10.
The US intends to suspend the additional 25 per cent tariff for a period of 180 days, which would lift in January should the parties fail to reach a deal. With the threat, the US retaliation is going after France's ubiquitous beauty and luxury companies such as LVMH, Kering SA, Hermes International and L'Oreal SA.
The countries have been engaged in a long-running dispute over digital taxes. The US considers a potential tariff on its tech companies as "unreasonable" and "discriminatory". "France's response will be unchanged", Finance Minister Bruno Le Maire said in Brussels on Saturday. "If there is no international solution by the end of 2020, we will, as we have always said, apply our national tax".
A joint international solution via the Organisation for Economic Co-operation and Development is the only way to solve the disagreement over how best to tax the tech companies, people familiar with Mr Le Maire's thinking said. BLOOMBERG