The Trump administration said on Wednesday it will investigate a French plan to impose a 3% tax on U.S. tech companies including Amazon, Apple, Facebook and Google, the New York Times reports.
Why it matters: This move escalates the administration's global trade fight, "stok[ing] tensions with the European Union," per the Times. It is "a step that could lead Washington to impose trade penalties," the Washington Post adds.
The big picture: If the administration pursues this probe into France — a U.S. ally — it will use the same legal mechanism that President Trump used to strike China with trade war tariffs last year.
- The investigation intends to "...determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce," U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday.
- French senators are scheduled to vote on the tax Thursday. Lighthizer anticipates it will pass.
- Other countries are also considering implementing new levies on digital services, Bloomberg reports.
Our thought bubble from Axios' technology reporter Ina Fried: How you see this depends largely on where you sit. In France and other places, this feels like a way to derive tax revenue from companies that are making a lot of money off people in their country. For the tech companies, this seems like an added and unique tax aimed at punishing U.S.-based companies
