Lighthizer: Tax Unfairly Singles Out American Tech Giants
President Donald Trump has authorized an investigation into France’s proposed digital services tax, which is seen as targeting major US tech firms. The probe, led by US Trade Representative (USTR) Robert Lighthizer, could result in new tariffs or trade measures in retaliation.
“The US is deeply concerned that France’s digital tax—expected to pass its Senate—unfairly impacts American companies,” Lighthizer said, announcing the launch of the investigation under Section 301 of the Trade Act. This tool has previously been used to scrutinize Chinese trade policies and EU aircraft subsidies.
France’s planned levy would impose a 3% tax on the French revenue of large internet businesses, potentially generating 500 million euros ($563 million) annually, according to French Finance Minister Bruno Le Maire. USTR noted that the services affected—such as digital advertising—are dominated by American companies like Google, Apple, Facebook, and Amazon.
Lighthizer emphasized the Trump administration’s concern over whether the tax discriminates against US commerce, saying, “We’ll determine if it’s unreasonable, discriminatory, or restricts US trade.”
Le Maire previously stated that around 30 companies would be impacted—primarily US firms, but also some Chinese, British, Spanish, German, and one French company. Some businesses of French origin, now foreign-owned, would also be affected.
Critics Call Tax ‘Protectionist’
The proposed law would apply to firms with annual global revenues above 750 million euros ($844 million) and revenues from digital services in France, such as online ad sales. Tech industry advocacy group ITI, which includes members like Amazon and Apple, voiced support for the US investigation but cautioned against tariffs.
“We encourage cooperation over confrontation and hope tariffs will not be used,” said Jennifer McCloskey, ITI’s policy VP.
US lawmakers from both major parties, including Senate Finance Chair Chuck Grassley and ranking Democrat Ron Wyden, supported the investigation. They condemned the French tax as “clearly protectionist,” arguing it unfairly burdens American firms and risks US jobs.
They called for countries to abandon unilateral taxes in favor of coordinated efforts through the Organisation for Economic Co-operation and Development (OECD), where talks on global digital taxation are ongoing.
Lighthizer reaffirmed the US commitment to those multilateral talks, saying the OECD process is the best route to adapt the international tax framework for the digital economy.
The news of the Section 301 probe was first reported by Bloomberg Tax, citing anonymous sources.
