10 July 2019   Leave a comment

European states have been debating new taxes on technology companies but so far only France has gone so far as to propose one. That proposal has elicited a sharp response from the Trump Administration which believes that the new tax unfairly singles out US Companies such as Google and Apple. The Washington Post reports:

“In an unusual move that threatens to worsen trade tensions with Europe, the Trump Administration said it will investigate whether a proposed French tax on tech companies discriminates against U.S. business, a step that could lead Washington to impose trade penalties.

The 301 investigation — the same type of probe that led the United States to slap tariffs on China last year — is a rare tool for Washington to use against a close ally, underscoring the Trump administration’s intent to continue playing tough on trade.

The investigation illustrates growing alarm among U.S. officials and industry executives about the prospect of new taxes on technology giants spreading beyond France. A number of other countries are considering similar levies, on the belief that wealthy U.S. tech giants aren’t paying enough in taxes worldwide.”

The use of tariffs to address the tax issues in another state is very unusual and it the move is likely to trigger off a number of issues not only with France, but also with the EU.

The British Ambassador to the US, Sir Kim Darroch, has resigned, saying that he could no longer perform effectively with the Trump Administration. Reuters characterizes the circumstances, which stem from the leak of highly unflattering memos written by Darroch about the Trump Administration:

“‘We don’t really believe this Administration is going to become substantially more normal; less dysfunctional; less unpredictable; less faction-riven; less diplomatically clumsy and inept,’ Darroch wrote in one cable.

“It led to a scathing tirade from the U.S. president.

“’The wacky Ambassador that the UK foisted upon the United States is not someone we are thrilled with, a very stupid guy,’ he tweeted, describing Darroch as a ‘pompous fool’”.

Darroch really had no alternative, but his resignation made it seem as if the British Government had capitulated to President Trump. The US-British “special relationship” is looking less special every day.

Posted July 10, 2019 by vferraro1971 in World Politics

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