France, US pursue rapprochement, agree to push cross-border tax reform

Janet Yellen is the first woman to lead the US Treasury and will face the daunting tasks of shepherding a $1.9 trillion economic rescue package through Congress. This week she phoned with her French and British counterparts to hammer out solutions for differences that grew under the Trump administration. AP - Andrew Harnik

Paris and Washington clashed during the Trump administration over France's tax on digital service companies and over reluctance from Yellen's predecessor Steven Mnuchin to move forward on talks to overhaul the rules for taxing cross-border commerce.

But in a statement issued by the French Finance Ministry, both Le Maire and Yellen "noted many convergences between their priorities, in particular on climate, international trade and cooperation within multilateral forums,". They also discussed how to revive multilateral relations in the G7 and G20 frameworks that had started to unravel as a result of former US President Donald Trump's unpredictable diplomatic moves.

Delighted to speak with @JanetYellen, whom I congratulated for her overwhelming confirmation as US Treasury Secretary 🇺🇸.

We discussed our common priorities : climate, coordination of our economic response to the crisis and international taxation. pic.twitter.com/g3KngKMVJZ

— Bruno Le Maire (@BrunoLeMaire) January 28, 2021

More cooperation pledged

In 2019, the Trump Administration applied 25 percent tariffs on imports of French, Spanish and German wines of less than 14 degrees in response to a dispute over European Union subsidies granted to European aerospace giant Airbus.

And in June last year, the United States walked away from earlier agreed plans on a global tax framework for technology companies.

At the time, then US Treasury secretary Steven Mnuchin told European finance ministers that discussions had reached an “impasse” and warned EU leaders of retaliatory measures if they pressed ahead with their own taxes. Le Maire described the remarks as "a provocation" towards the Organisation for Economic Co-operaton and Development (OECD) which oversaw the talks.

According to the finance ministry, Yellen now expressed a renewed commitment to "active US participation in the ongoing OECD discussions".

Overall, Yellen and Le Maire stated the need to reduce trade tensions between the United States and Europe, and Le Maire stressed the "very penalizing nature of the sanctions for French winegrowers".

The Minister will visit Washington D.C. "as soon as the sanitary conditions will allow it," according to the statement.

(with Reuters)