The European Union will hit back at “unacceptable” US tariff threats against French products, finance minister Bruno Le Maire has warned.
Shares in luxury French retailers took a hit this morning after the US issued new tariff threats in retaliation against the country’s new tech tax.
The US government yesterday proposed tariffs of up to 100 per cent on $2.4bn (£1.8bn) of French imports, including champagne, handbags and cheese.
Shares in handbag specialist Hermes dropped almost two per cent, while luxury goods giants LVMH and Kering were both down roughly 1.5 per cent. Verallia, which makes glass bottle for brands including Dom Perignon, fell 2.2 per cent.
Overall, France’s Cac 40 index ticked up just over two per cent.
“In case of new American sanctions, the European Union would be ready to riposte,” Le Maire told French media.
The fresh tariffs follow an investigation by US trade officials into a new digital services tax unveiled by President Emmanuel Macron.
Washington has argued that the new measures, which will impose a three per cent levy on digital companies with global revenues of more than €750m (£685m), unfairly discriminates against US firms such as Facebook, Amazon, Apple and Google.
US trade representative Robert Lighthizer yesterday said the government was considering similar investigations into digital services taxes in Italy, Austria and Turkey.
Former chancellor Philip Hammond made similar plans for the UK in last year’s autumn Budget, proposing a two per cent levy on revenues of more than £500m. The Treasury had vowed to plough on with the levy in July, despite the US’s threat of action against France.