WASHINGTON—The U.S. on Thursday suspended plans to impose tariffs of 25% on French luxury goods in response to France’s tax on big tech companies like Facebook Inc. and Amazon.com Inc., saying it wants to coordinate its response with its efforts in similar disputes with other countries.
The U.S. Trade Representative threatened to impose the tariffs last year, in retaliation for France’s 3% levy on certain revenue from big technology companies, which the U.S. said unfairly targeted American businesses. The tariffs had been scheduled to take effect Wednesday.
The suspension of the tariffs on French products was welcomed by U.S. importers and retailers that had criticized the such punitive tariffs as a tool that aims to protect one industry at the expense of another, while hurting American consumers.
But the decision also puts the onus on President-elect Joe Biden and his administration to address increasing demands by other countries for global technology companies to pay more taxes where their customers are located.
“The Biden administration is being given the opportunity to implement their own strategy on discriminatory digital taxes,” said Sen. Ron Wyden (D., Ore.), the likely next chairman of the Senate Finance Committee. “America is going to have to respond. Many of these unilateral taxes have been designed to target American companies that are generating high-skill, high-wage jobs.”