U.S. Suspends Plan to Impose Tariffs on French Luxury Goods -- Update

By Yuka Hayashi 

WASHINGTON -- The U.S. Trade Representative said Thursday it had suspended plans to impose tariffs of 25% on French luxury goods related to a dispute over France's digital-services tax, citing investigations into digital services taxes in 10 other countries.

The proposed tariffs were announced last year, in retaliation for digital services taxes on U.S. companies such as Facebook Inc. and Alphabet Inc., and had been scheduled to take effect Wednesday.

The USTR's decision leaves the incoming Biden administration to come up with a solution for the growing dispute with countries from around the world that increasingly want global technology companies to pay more taxes where their customers are located.

In suspending the French tariffs, the USTR said its investigations into digital-services taxes, or DSTsm in other countries "have significantly progressed, but have not yet reached a determination on possible trade actions."

"A suspension of the tariff action in the France DST investigation will promote a coordinated response in all of the ongoing DST investigations, " the USTR said in a statement.

The agency said it wasn't taking any specific actions for now but would continue to evaluate "all available options." Investigations into practices of the European Union, Austria, Brazil, Czech Republic, Indonesia, Spain and the U.K. continue.

The suspended tariffs would have targeted a narrow list of French products, including handbags, soap, and cosmetics such as lipstick and nail polish.

The USTR, in a filing last year laying the groundwork for the tariffs, said it was responding to the French tax, calling it an "unreasonable or discriminatory" measure that "burdens or restricts" U.S. commerce.

Write to Yuka Hayashi at [e-mail]

(END) Dow Jones Newswires

January 07, 2021 13:30 ET (18:30 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.