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US threatens 100% tariffs on French cheese and champagne

60+ French Products Might Face A 100% Tariff Increase

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Three weeks ago, Washington shared that about 63 French products might face a tariff increase in the United States. From champagne to handbags to Roquefort cheese, certain products made in France might face a new tariff of up to 100%.

While France has just passed the “GAFAM law”, a new tax towards Silicon Valley giants settled in France, which will require them to pay up to 3% of their yearly revenue generated in the country, many experts think that the American decision is a retaliation measure. 

In case of a 100% tariff increase, more than $2.4 billion worth of products would be put at risk.

63 French products on the list

On December 2nd, the American government announced that it would impose additional customs duties of up to 100% on nearly 63 French products. This would amount a total of $2.4 billion worth of goods.

According to MSNBC, “The U.S. Trade Representative announced Monday that France’s tax on digital companies is “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies.”. 

Products that might qualify for this increase include Roquefort cheese and other French dairies, as well as beauty products, makeup, soap and luxury handbags.

The two French luxury leaders, LVMH and Kering expressed their concern — especially LVMH, who recently developed its strategy towards the United States and acquired Tiffany & Co for $14.5 billion a few weeks ago.

A “retaliation” tariff?

To many onlookers, Washington has devised this new tariff increase as a retaliation to the French newly-passed law called “GAFAM law”, voted last April.

This new law, led by French Minister of Economy Minister Bruno le Maire, inspired other countries in the European Union,  including Italy, to the dismay of Washington.

The Office of the United States Trade Representative (USTR) published a report stating that this French law would harm American businesses overall “and that it is the duty of the United States to respond to it by adopting similar measures.”

Read on Alvexo: “Google Slammed with €150 Million Five Over Advertising in France”

The legislation targeting digital giants, is aiming to pressure the social media company to reduce their online advertising and the sale of users’ private data.

Will France give up its GAFAM law?

Will France give up in the face of pressure from Washington? As it turns out, the French government is very likely to give up the law in order to keep on exporting products to the United States, which represent France’s third market for fashion luxury goods and food.

While both countries’ administrations are undergoing a tumultuous Christmas break — the impeachment case in Washington versus the national strike in France — both parties said they would resume talks on 14 January.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.