Presidents Emmanuel Macron and Donald Trump have agreed to extend till the end of the year negotiations on a dispute over a French tax targeting online giants, postponing Washington’s threat of sanctions, French officials said Tuesday.
French Finance Minister Bruno Le Maire, speaking before a Brussels meeting with EU counterparts, said: “Macron and Trump had a very constructive discussion… and they agreed to avoid all escalation between the US and France on this digital tax issue”.
A French diplomatic source said the French and US leaders, who spoke by telephone on Sunday, agreed to give negotiations a chance to “find a solution in an international framework” and avoid “a trade war that will benefit no one”.
Macron tweeted Monday that he had had a “great discussion” with Trump on the issue. “We will work together on a good agreement to avoid tariff escalation,” he said.
“Excellent!” replied Trump on Twitter.
The White House said the two men spoke and “agreed it is important to complete successful negotiations on the digital services tax, and they also discussed other bilateral issues”.
Trump said Tuesday that he was “very happy with the result”.
The dispute began last year when Paris approved a levy of up to three percent on revenues earned by tech companies in France, as international efforts dragged on to find a new model for taxing revenues earned via online sales and advertising.
Tech companies often pay little tax in countries in which they are not physically present.
Washington said the tax singled out US companies such as Google, Apple, Facebook, Amazon and Netflix. It threatened retaliatory duties of up to 100 percent of the value of French imports of such emblematic goods as Champagne and Camembert cheese.
The European Union had said it would back France if such tariffs were levied, raising the prospect of a transatlantic trade war.
