Certain products from France, including leather handbags and certain beauty preparations and soaps, will soon become pricier. Following a disagreement over how to tax US tech companies in France, the US Trade Representative has imposed additional duties of 25% on French goods, effective 6 January 2021 – a cost that importers and retailers will have to absorb or pass on to their customers.
The Organisation for Economic Cooperation and Development's Inclusive Framework aims to reach an agreement on a multilateral taxation framework for the digitised economy by the end of 2020. However, US Trade Representative Robert Lighthizer recently confirmed that the United States has withdrawn its participation from the digital tax talks. The United States' withdrawal is a step towards new tariffs on imports from countries that apply their own digital services tax.
Providers of telecoms, internet and digital services, as well as IT vendors and equipment manufacturers, will soon find doing deals with foreign entities a little more risky and complicated. A new review process soon to be underway at the Department of Commerce is designed to ferret out transactions that pose a threat to US national security, but provides parties whose deals are being evaluated little time to comment.