US announces tariffs on French imports in response to French DST

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July 2020

Overview

In a notice dated July 10 (the Notice), the US Trade Representative (USTR) announced additional tariffs of 25% on certain imports from France in response to the French 3% digital services tax (DST), which the USTR has determined is unreasonable or discriminatory and burdens or restricts US commerce, as previously explained in a notice dated December 6, 2019. The Notice states that the USTR will suspend application of the additional duties for 180 days, through January 6, 2021, ‘to allow additional time for bilateral and multilateral discussions that could lead to a satisfactory resolution of this matter.’ This timing also aligns with France’s decision to defer the payment of DST until December 2020.

The takeaway

US retailers that sell the French products specified in the Notice should analyze the impact of the additional tariffs, and consider potential mitigation strategies should the tariffs go into effect on January 6, 2021. Also, with further DST investigations underway, the prospect for additional tariffs on products from several other countries or regions should be considered in examining an overall supply chain strategy.

Contact us

Anthony Tennariello

Customs and International Trade Co-leader, PwC US

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