July 20, 2020
U.S. to Impose 25% Tariffs on French Products in Response to Digital Tax
The Office of the U.S. Trade Representative announced the imposition of a 25% import duty on various French products in response to that country’s new Digital Services Tax, which Washington says discriminates against U.S. tech firms such as Google, Facebook and Apple Inc.
The tariffs are set to take effect Jan. 6, 2021. Products that are set to be subject to the tariffs include makeup, soap and handbags, according to a notice issued by the USTR.
The dispute arises from new legislation introduced last year by France aimed at stopping multinationals from avoiding taxes by setting up headquarters in low-tax EU countries. Currently, tech giants like Google and Facebook pay nearly no tax in countries such as France where they have large sales.
The pioneering digital services tax would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than €750 million (US$855 million) and French revenue exceeding €25 million (US$28 million).
The French products scheduled for January 2021 tariffs over the DST include the following:
- 3304.10.00: Lip make-up preparations
- 3304.20.00: Eye make-up preparations
- 3304.30.00: Manicure or pedicure preparations
- 3304.91.00: Beauty or make-up powders, whether or not compressed
- 3304.99.50: Beauty or make-up preparations & preparations for the care of the skin, excl. medicaments but incl. sunscreen or sun tan preparations, not elsewhere specified or indicated (nesoi)
- 3401.11.10: Castile soap in the form of bars, cakes or molded pieces or shapes
- 3401.11.50: Soap, nesoi; organic surface-active products used as soap, in bars, cakes, pieces, soap-impregnated paper, wadding, felt, for toilet use
- 3401.19.00: Soap; organic surface-active products used as soap, in bars, cakes, pieces; soap impregnated paper, wadding, felt, not for toilet use
- 3401.20.00: Soap, not in the form of bars, cakes, molded pieces or shapes
- 3401.30.10: Organic surface-active products for wash skin, in liquid or cream, contain any aromatic/mod aromatic surface-active agent, put up for retail
- 3401.30.50: Organic surface-active products and preparations for washing the skin, in liquid or cream form, put up for retail sale, nesoi
- 4202.21.30: Handbags, w/ outer surface of reptile leather
- 4202.21.60: Handbags, w/ outer surface of leather, composition or patent leather, nesoi, n/o $20 ea.
- 4202.21.90: Handbags, w/ outer surface of leather, composition or patent leather, nesoi, over $20 ea.
- 4202.22.15: Handbags, w/ outer surface of sheeting of plastics
- 4202.22.40: Handbags, w/ outer surface of textile materials, wholly or in part of braid, nesoi
- 4202.22.45: Handbags, w/ outer surface of cotton, not of pile or tufted construction or braid
- 4202.22.60: Handbags, w/ outer surface of veg. fibers, exc. cotton, not of pile or tufted construction or braid
- 4202.22.70: Handbags, w/ outer surface containing 85% or more of silk, not braided
- 4202.22.81: Handbags, w/ outer surface of MMF materials
- 4202.22.89: Handbags, w/ outer surface of textile materials nesoi
(Source: The Hill)