“Digital tax” truce: U.S., France agree to postpone potential tariff war until end

French President Emmanuel Macron said on Monday he had “significant discussions” with US President Donald Trump about the digital tax and said the two countries would work together to avoid tariff increases. French diplomats say Macron and Trump have agreed to postpone a potential tariff war until the end of the year, during which time negotiations on digital taxes at the Organisation for Economic Co-operation and Development (OECD) continue.

"Digital tax" truce: U.S., France agree to postpone potential tariff war until end

“They agreed to continue negotiations until the end of the year,” the source said. In the meantime, no more tariffs will be imposed. ”

France decided in July to impose a digital tax on about 30 internet giants, which it is understood to be aimed at at least 750 million euros ($847 million) in global digital services revenues, and at least 25 million euros ($28 million) of them from France at a 3 percent rate.

In a blowback to France’s digital tax, the US was prepared to impose tariffs of up to 100 per cent on France’s $2.4bn worth of products.

The French authorities have repeatedly said that any international digital tax treaty within the OECD would immediately replace the French digital tax.