On Tuesday, Washington proposed a spate of tariffs on up to $2.4 billion worth of French imports, including champagne, cheese and handbags to retaliate against a new French tax on US tech giants, including Google, Amazon and Facebook.
French luxury stocks were hit by the US’ latest threat to slap punitive duties of up to 100% on a number of French products.
The maker of Louis Vuitton handbags, LVMH, as well as and Moet & Chandon champagne, plummeted by 2.1% in Paris trading, with makeup company L’Oreal and leather-goods maker Hermes declining by 1.4% and by 2.1%, respectively.
The USTR said that in retaliation, it is proposing tariffs on up to $2.4 billion of French imports, including cheese, handbags, makeup and sparkling wine.
France warned that the EU would respond in kind to the US introducing tariffs.
Economy and Finance Minister Bruno Le Maire told Radio Classique on Tuesday that the French government was “in contact yesterday with the European Union to ensure that if there are new American tariffs there will be a strong European response.”
French Approves GAFA Tax
In July, France passed a 3% tax that targets around 30 big tech companies including Facebook, Amazon and Google.
The tax, called “GAFA” by the French media (an acronym that means Google, Apple, Facebook and Amazon), is directed against digital companies with global annual sales of more than €750 million ($849 million) and sales in France of at least €25 million.
He previously said that the new tax would cover advertising, websites, and the resale of private data.