3LR trade ideas
US could impose 100% tariffs on French goods after Google taxWhat was President Macron thinking about designing a tax for tech companies... A quick reminder, it will be separated in two categories — marketplace (Amazon’s marketplace, Uber, Airbnb…) and advertising (Facebook, Google, Criteo…). Despite the fact it wasnt planned specifically for American companies, the vast majority of big tech companies that operate in France are American. Thus, a company that generates more than €750 million in global revenue and €25 million in France, will have to pay 3% of the French revenue in taxes.
As expected, the U.S. Trade Representative claimed that“France’s Digital Services Tax (DST) discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies.” And, as a result, now we might see tariffs that could be as high as 100% on French goods (wine, cheese, handbags…).
What is going to happen now? Frnce will say that the response will be equally damaging, but i personally doubt they manage to impose significant tariffs unless the whole European Union agrees to cooperate and istart acting. However, even in this case no one can guarantee that th EU will achieve something worthwhile... So, with a high probability we will see another decrease in the Cac-40.
