The European Union mentioned on Tuesday that it is prepared to retaliate against the United States if US President Donald Trump will go ahead with his previously mentioned plans of imposing tariffs on EU-made imports. Trump previously threatened the trading bloc that he would impose duties as high as 100 percent on EU-made luxury products such as handbags and champagne worth $2.4 billion.
Trump's threats came right after the US government had accused the EU of using its new digital service tax in France to give EU tech companies an unfair advantage over their US counterparts. The new accusation served to intensify the already heightened trade dispute between the US and the EU.
The EU and the US are already at odds over the former's provision of "unfair" subsidies to European aircraft manufacturer Airbus, which the US claims gives it an unfair advantage over US aircraft manufacturer Boeing. The World Trade Organization (WTO) already gave the US the green light to impose retaliatory tariffs over the issue, a decision which the EU had already tried to appeal.
Trump mentioned in an interview regarding the EU's digital service tax that the US is the only one that is supposed to tax American companies and not anyone else. The president went on and stated that the situation could go in only two directions, either both sides work on a mutually beneficial tax or the US continues with its decision to add new tariffs on EU imports.
The United States' planned tariffs are also heavily focusing on French products, a decision that has become very unpopular in the European country. It has also served to further degrade the already fragile relations between the US and France, particularly between Trump and French President Emmanuel Macron.
The French leader has openly protested against the US' "unrealistic" trade negotiations tactics and its stand on Iran. Trump's recent volley against Macron came on Tuesday when the president criticized EU leaders as having experienced "brain death."
US Commerce Secretary Wilbur Ross mentioned on Tuesday that France's digital service tax was a "very radical notion" and potentially "dangerous" given that it taxes revenues as opposed to earnings. Ross further explained that other countries should just work hard to develop their own technologies rather than punish American firms for their success.
France's Finance Ministry condemned Trump's tariff threats and called it an unacceptable move. France and the EU mentioned that all of its 28 members would act as one to fight against the United States if Trump does go ahead with his planned tariffs.
