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France digital tax due to jealousy over US tech dominance


France’s move to tax digital services partly stems from it being envious of the United States’ stronghold on technological innovation, Commerce Secretary Wilbur Ross told CNBC on Tuesday.

“Europe doesn’t have the real high-tech champions and the real e-commerce champions that we do,” Ross said in an interview on “Squawk on the Street.” “There’s a tremendous amount of jealousy about that.”

France in July passed a tax that targets around 30 big tech companies including Facebook, Amazon, Apple and Alphabet’s Google. The 3% levy applies to revenue from digital services earned by firms with more than $27.86 million in French revenue and $830 million worldwide.

While French President Emmanuel Macron has insisted it’s not aimed specifically at U.S. tech companies, Ross said that was a lie. “It’s hard to say that it wasn’t designed as an anti-American thing,” Ross added. “The criteria, whether designed deliberately or not, essentially include only American companies.”

Ross also thinks that part of the motivation for the digital tax is France’s need bring in revenue to mitigate budget deficits. Before joining the Trump administration, Ross made a fortune in the investment world, running W.L. Ross & Co., and buying stakes in distressed assets.

On Monday, the U.S. government said it found France’s new digital services tax would harm U.S. tech companies. In retaliation, it threatened to put punitive duties of up to 100% on $2.4 billion in French imports of Champagne, cheese and other products.

The U.S. trade agency said it would collect public comments through Jan. 14 on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for Jan. 7. It did not specify an effective date for the proposed 100% duties.

— Reuters contributed to this report.

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