Trump administration launches investigation into French plan for tax on tech giants

The Trump administration on Wednesday announced an investigation into the French government over its plans to implement a tax on technology companies.

United States Trade Representative (USTR) Robert Lighthizer expressed concerns that the French digital tax could disproportionately affect American companies.

“The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce,” Lighthizer said in a statement.{mosads}

The French finance minister said in March that the country would impose a 3 percent tax on the annual revenues of technology companies that make at least 750 million euros annually and provide services to users in the country.

The tax would affect multiple U.S. tech giants, including Apple, Google and Amazon.

The USTR investigation could serve as a precursor to the implementation of tariffs or other trade measures against France at a time when President Trump has ignited trade disputes with other allies.

The USTR will conduct the assessment under the authority of Section 301, the same provision that Trump has used to cite national security concerns in imposing steep tariffs on Chinese imports.

Trump has faced criticism from Republicans and Democrats alike over his liberal use of tariffs as a negotiating tool. The U.S. and China have been engaged in a tit-for-tat trade dispute, and Trump has threatened Japan, Mexico and the European Union with tariffs over what he has deemed unfair trade relationships.

But Wednesday’s investigation was greeted with bipartisan support.

Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) said the French policy “unfairly targets American companies in a way that will cost U.S. jobs and harm American workers.”

Rep. Kevin Brady (R-Texas), the top Republican on the House Ways and Means Committee, said he backed the move from the Trump administration and called on France to scrap the measure altogether.