Unlikely Allies: Trump, Tech Giants Team Up, Fight French Tax

An unlikely alliance of President Trump, Amazon and Silicon Valley teamed up Monday to battle a common enemy, France, in a high-stakes fight that carries major consequences for cutting-edge commerce on both sides of the Atlantic.

The Office of the U.S. Trade Representative hosted a public hearing in Washington as part of its investigation into France’s unprecedented “digital services tax,” or DST, a 3% levy on tech revenue generated online in the French domestic market. Officials from Amazon, Google, Facebook, Microsoft, Twitter and a host of other heavy hitters spoke out against the tax, marching in lockstep with the White House in arguing that the move will raise prices for customers and could lay the cornerstone for construction of a confusing, dangerous global patchwork of taxes and regulation.

France is the first country to enact a DST, and officials in Paris have argued that companies such as Amazon and Facebook make huge profits within their borders while skirting taxes. Spain, New Zealand, Italy and other nations are reportedly considering similar moves as they search for ways to collect revenue from firms with a massive presence in their domestic economies.

U.S. tech giants have such a fearsome reputation in Europe as a competitive threat that they have earned an acronym, the “GAFAs,” for Google, Apple, Facebook and Amazon. The GAFAs are accused of setting up nominal headquarters in low-tax states, notably Ireland, to lighten their tax bills across the European Union.

The next round of the argument is set for later this week. French President Emmanuel Macron is reportedly planning to raise the issue with Mr. Trump and other world leaders as the host of the Group of Seven summit that starts Saturday in Biarritz.

Mr. Trump exploded on Twitter when France imposed the levy last month, saying Paris was deliberately targeting “our great American technology companies.”

“If anybody taxes them, it should be their home Country, the USA,” Mr. Trump tweeted. “We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”―Washington Times