
US launches inquiry into French plan to tax tech giants - Isofarro
https://www.bbc.co.uk/news/world-europe-48945828
======
Ragnarork
Quite funny of the US to complain about protectionism. I guess that's the
paradox attached to it. When you do it it's fine, when someone else does it
and you're affected, suddenly it's "discriminatory". Well yeah it's always
been discriminatory in nature.

They make a profit somewhere, they pay their taxes, period. Those loopholes
need to be closed.

~~~
fyoving
Even with recent tariffs, US tariffs are still generally low, it's hardly a
poster child for "protectionism", the EU has other barriers in addition to
tariffs and much of it is due to french protectionism.

If you think that these "loopholes" should be closed then close them for all
companies and countries, don't enact discriminatory laws and then act
indignant about it.

~~~
nolok
The US strong protectionism is not through tariffs but through tax incentives,
targeted investments hidden as national security contracts and things like
"buy american" acts.

Just because you dress it up doesn't change what it actually is.

~~~
fyoving
Are you litigating the boeing v airbus thing? didn't the WTO rule that airbus
is receiving billions in illegal subsidies?

And are you suggesting that france doesn't subside specific industries?

If you're complaints are exclusive to the aviation and defence industries then
a US complaint regarding the EU and france could include that and every other
industry.

~~~
hef19898
AFAIK the case against Boeing is still open. Arguably Airbus is getting direct
subsidies (WTO ruling) while Boeing seems to get pampered by overpriced
defense contracts which has the same result more or less (no WTO ruling yet).
Conclusion is nobody is innocent, just guilty in different ways.

~~~
fyoving
"EU paid Airbus billions in illegal subsidies, WTO rules"
[https://www.bbc.com/news/business-44120525](https://www.bbc.com/news/business-44120525)

~~~
olivepistacchio
Imagine if Airbus was not there, there would be no safe plane to do short-
haul.

~~~
sokoloff
Nonsense. Plenty of 717, non-Max 737, MD-88, MD-90, and E170/175/190/195 out
there.

------
jklepatch
US has a trade deficit with France. So potentially there is more to loose for
France in case of a trade war: [https://www.census.gov/foreign-
trade/balance/c4279.html](https://www.census.gov/foreign-
trade/balance/c4279.html)

And generally speaking the US has a trade deficit with Europe:
[https://ustr.gov/countries-regions/europe-middle-
east/europe...](https://ustr.gov/countries-regions/europe-middle-
east/europe/european-union)

My understanding of the economic system between the US and the world is that
other countries support the US dollar by using it for trade, and that the US
in turn is able to print a lot of US dollars that can be used by american
consumers to buy goods from the world.

Could other countries retaliate to US trade tariffs by dedollarizing trade?

~~~
geocar
Not sure I agree with the analysis, at least on France.

France's top exports to the US are aircraft parts and beverages (wine).

Since the US needs those parts to export the (assembled) planes, I think the
aircraft lobby (e.g. Boeing) will press hard to prevent a tariff here because
it'd raise rates across the board, so that leaves wine: My hunch is even a
100% tariff on wine is unlikely to dissuade anyone from purchasing French wine
-- the American wine is better, so the only people buying it are people who
really wanted French wine anyway oh là là.

I don't know yet what I think about a trade war with all of Europe though.

~~~
jklepatch
Thanks for this precision. Knowing this detail about aircraft parts seems to
change the dynamic though.

I have to disagree with one point though:

“American wine is better than French wine....” (gulp!).

~~~
geocar
A certain amount of that is certainly tongue-in-cheek. I think if you compare
a $20 wine in California to a €10 wine you buy somewhere along the Garonne,
you're probably going to enjoy the French wine more.

But we're talking about what changes buying-behaviour, and it's important to
consider that as a savvy shopper in the US you can go into a wine shop and buy
everything under $20, and you'll find local wins. That's how you anchor your
expectations about prices and quality. Now whether that's because of
duty/import or it's because of shipping, or it's simply because only big
brands will bother exporting is, or any other reason, _those_ reasons are out
of scope simply because a tariff isn't going to change them in the slightest.

~~~
user5994461
For reference, French wine in France can be had for 3 or 4 euros a 75 cl
bottle.

That's for good wine. There are cheaper wines available of course.

If you're saying $20, you must be talking about a 6 pack ;)

~~~
pyrale
> For reference, French wine in France can be had for 3 or 4 euros a 75 cl
> bottle.

This legend about french cheap wine is getting better and better everytime I
hear it. 3-4€ is the low price for wine in a bottle. Some are decent, some are
utter shit. But that's not "for good wine". That's entry level, which
sometimes is decent.

I know some of the export wine is cooking-grade shit and people don't know the
difference. But for people versed in wine in the US, the €3-4 bottles aren't
going to cut it.

~~~
user5994461
I don't know how it is in a WallMart in the US but in a French Carrefour there
can be a 20 meter long aisle dedicated to wines and spirituous, possibly both
sides of the aisle.

That's a huge selection covering all types of wine for as little as a few
euros. Price is not a predictor of anything, there are both good and bad wines
all over the place.

Wine is truly a commodity in France. There are very few people paying 10€ a
bottle unless you're talking Champagne, that's not considered a wine.

edit: See for yourself [https://www.carrefour.fr/r/boissons-et-cave-a-
vins/cave-a-vi...](https://www.carrefour.fr/r/boissons-et-cave-a-vins/cave-a-
vins?sort=facet_price&noRedirect=0)

~~~
pyrale
I _am_ french. I know the supermarkets, and still I frequently buy bottles
above 10€. My demographic is not small, there are just many people that can't
afford storage space for bottles and don't want to buy entry-level wine.

------
csomar
> Countries including France and the UK have accused firms of routing some
> profits through low-tax EU member states such as Ireland and Luxembourg.

This seems to be the problem. The EU laws have allowed these companies to
avoid taxes. Small countries just next to France (Luxembourg) are able to help
these companies. But France will not go against these countries and instead
try to handle things through taxes.

I don't think this will workout greatly for France. France solution to
everything seems to be: "Put a tax on it". The EU needs to get its crap
together.

I don't like Tariffs. But if you worked internationally you should know that
the US is one of the most open countries when it comes to doing business. You
can open a company, a bank account, get a tax ID, buy shares in US companies,
trade, etc...

~~~
speeq
The UK accuses firms of routing profits through low-tax EU member states?

Did they mention Jersey, Guernsey, Isle of Man + Anguilla, Bermuda, British
Virgin Islands, Cayman Islands, Gibraltar, Turks and Caicos Islands?

Well, I suppose they aren't EU member states, carry on.

~~~
csomar
Same with France: Monaco. That's why I said they got to get their shit
together.

~~~
hadrien01
Monaco is not part of France.

------
pjc50
National sovereignty versus globalisation again. Is it reasonable for a
company to make profits from customers in a country and then not pay that
country's profit-based taxes?

(Also, the US trying to bully France on this one is unlikely to go well, that
tends to trigger a French nationalist response.)

~~~
bantunes
It's not reasonable. But it sure is profitable.

------
aluren
To be frank, a 3% tax is too little too late.

~~~
nolok
We still hope to get it turned into a global EU thing rather than each of us
bickering with its own ten of a percent competition over who gets screwed up
more. But several EU countries are not on board, so we're taking baby steps,
mostly aiming to prove that it does work and no those tech giants will not
leave the french market (or if they do, yes someone else will rise in place).

~~~
dustinmoris
Agreed, I applaud France to take a first step in the right direction.

~~~
Maarten88
I wonder about the US response. Because they themselves also get shortchanged
by the same companies, yet still doing their legwork, in this case by bullying
France.

Why doesn't the US tell Google to go complain to Bermuda, and implement a
comparable tax themselves? And apply it to all corporation evading US
corporate taxes while using US infrastructure? (big pharma)

(The answer, of course is nationalism and corporate money in US politics)

------
olivepistacchio
funny how people feels supportive of some companies based on very loose
national links. If you think companies have a national interest at heart (I
will make an exception for Chinese), I have a bridge in Brooklyn to sell to
you.

------
raverbashing
If I'm not mistaken the UK is planning to enact a similar tax as well

------
Bayart
I guess we'll get the usual response of the US trying to bring France to its
knees by putting tariffs on wine and cheese.

~~~
yusi-san
They have different pressure means on France now, like what they did about
Alstom which is a strategic company for France (they produce essential
elements about nuclear plants, nuclear submarines for example) now in the US
hand through General Electric.

~~~
Bayart
Correct me if I'm wrong but GE bought the energy/grid part of the company, not
the infrastructure/transportation part.

~~~
ElKrist
The turbines production is now under GE

------
dustinmoris
The US can continue to bully everyone around them, but one day there will be
no friends left and while the US is starting a trade war (or even an actual
war) with friends and enemies other nations will strengthen their relations
and the power balance will shift eventually.

China has been on track to overtake the US as the largest economy for many
years now. The US obviously feels threatened by the shift of economic powers
and currently tries every thing they can to prevent this from happening, but
it's going to happen regardless. China has a stable country, a hard working
population, people feel content and the government is looking after its people
despite what Western media is reporting. The Western world is increasingly
becoming divided, fueled by capitalist greed, social media which is anything
but "social", huge wealth disparities, racism and many other deep ingrained
problems. The US might complain about other nations spying, etc., but it is
the US and the NSA who has been the only nation which has been proven black on
white that they have been grossly spying on everyone else in this world, it is
the US which is the only nation which is constantly starting wars with other
nations and destabilising economies. It's not China, nor France, nor the EU.

I can only recommend anyone in the US to go and visit other nations and
explore the world and it becomes very quickly apparent that the Western world
has some deep issues which other countries seem to be much better in control
of. If entire freedom of everything means that people live divided, in
poverty, exploited, plagued by suicide, mental health issues, obesity and mass
shootings, then maybe the way the West has shaped in the last 50 years is not
all that great which everyone wants us to believe.

Other countries have other issues, but honestly, after being to many many
other places and far East I can only say that these problems look minor in
comparison to what I observe in the West.

~~~
nolok
I don't stricly disagree (nor agree) with your comment, but there are several
thing that you include as "a global grave issue of the western world" in
general but is actually very US-centric. When I look at the list you give,
"people live divided, in poverty, exploited, plagued by suicide, mental health
issues, obesity and mass shootings", it's not that those issues don't exists
in other countries, but in the western world the US has that strange habit of
always exhibiting the most extreme form, and frankly to not look like it's
working and making any advance at fixing them.

~~~
kodz4
The US is a much more diverse population and a much larger population. It's
going to be more chaotic than anything the Europeans have to deal with.

But dealing with that chaos, at that scale, produces lessons and learning that
won't happen anywhere else, other than probably India.

~~~
maxheadroom
> _The US is a much more diverse population..._

Why is this _always_ a fallback reference point? It is demonstrably
false[0,1,2,3] and is continually regurgitated - as if the continued
repetition would make it consequently true. There are countries in Europe that
are far more diverse than the United States. Full stop.

> _But dealing with that chaos, at that scale, produces lessons and learning
> that won 't happen anywhere else, other than probably India._

You could start with your immediate neighbours, yeah? Canada and Mexico are
both far more diverse than the United States and would - by your own argument
- be far more chaotic than anything the United States or Europe has to deal
with, yeah?

[0] -
[https://en.wikipedia.org/wiki/List_of_countries_ranked_by_et...](https://en.wikipedia.org/wiki/List_of_countries_ranked_by_ethnic_and_cultural_diversity_level)

[1] - [https://www.pewresearch.org/fact-tank/2013/07/18/the-most-
an...](https://www.pewresearch.org/fact-tank/2013/07/18/the-most-and-least-
culturally-diverse-countries-in-the-world/)

[2] - [https://www.atlasandboots.com/worlds-most-diverse-
country/](https://www.atlasandboots.com/worlds-most-diverse-country/)

[3] - [https://archive.fo/9AV1K](https://archive.fo/9AV1K)

~~~
kodz4
Just point at the data. The extra layer of attitude doesn't sell your
argument, but just distracts from it.

Sort the first table by rank US - 87 UK -109 France - 117 Germany - 148. When
we talk about the West who else is anyone referring to? Denmark - 144. Norway
- 146.

My comment is in response to someone separating the US from the west, not US
compared to the rest of the world. So don't be in such a hurry to react.

The data shows the US is more diverse than other western countries.

Population is another important factor. What happens in a city of 10 million
people and what happens in a country of 10 million people is very different. I
come from India and have lived in both the US and Europe. My city has a
population somewhere between Ireland and Norway but it's impossible to handle
social issues the way those countries do or use them as models precisely
because of the population density and diversity.

~~~
JAlexoid
Belgium(65) and Switzerland(63) are definitely western world.

------
fyoving
Shouldn't be a long inquiry, this tax is textbook discriminatory trade
barrier.

If you look at EU policy as france and germany protecting their perceived
interests by targeting US tech companies it starts making sense, I think a
rule of thumb there is: "if it hurts google it should be law".

~~~
nolok
> by targeting US tech companies

It does not. In a preliminary evaluation, there are 26 companies that would
match the criterias, 11 are not americans, 4 of them (that's 1/6th) are even
french companies to begin with.

• Vente de biens: Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten,
Schibsted, Wish, Zalando.

• Intermédiaire de services: Amadeus, Axel Springer, Booking, Expedia,
Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber.

• Publicité en ligne: Amazon, Criteo, Ebay, Facebook, Google, Microsoft,
Twitter, Verizon.

The point is to catch up with something everyone else has figured out: that
the value is in the users data. Investors have caught up to it and acted on
it, so did VC, so did companies, so did everyone ... Except governments. If
the data is what you extract your value from, then it should be normal that it
is what you are taxed on.

~~~
fyoving
If my math is correct then most of the companies are American, and by far most
of the potential revenue.

Considering the rhetoric leading to this tax and the french government's many
raids and failed investigations into US companies and their taxes it's
difficult even with careful wording for the french government to deny the
actual target of this tax in a WTO type setting.

~~~
etripe
Maybe the US should be targeting those companies, too. I don't think you can
really say a multinational still is or acts "American", even if a majority of
its employees and its owners are.

