President Donald Trump is planning to launch a probe into France’s intent to implement a digital tax initiative targeting large internet companies, an investigation that could lead to tariffs or trade restrictions.
Citing sources familiar with the matter, Reuters reports the president will task U.S. Trade Representative Robert Lighthizer with completing an investigation of the so-called GAFA — Google, Apple, Facebook and Amazon — tax, which would apply a 3% levy on French revenue generated by tech firms.
The tax applies to companies with revenues over 750 million euros (about $845 million) per annum, a relatively high bar that would target about 30 firms, most of them American. As noted by the report, companies from China, Germany, Spain and the UK are also affected by the proposed tax. One French firm and a handful of companies with roots in France would also be subject to the 3% tax, the report said.
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