Global trade wars got a boost by the EU after EU countries began hitting U.S. tech companies with a digital services tax.
France has hit Google, Apple, Facebook, Amazon and other U.S. tech corporations with a 3 percent digital services tax. A number of other countries are considering similar taxes because they believe that wealthy U.S. tech giants aren’t paying enough in taxes worldwide.
The Trump administration has launched an investigation into whether this French tax on U.S. tech companies discriminates against U.S. corporations, a step that could lead Washington to impose trade penalties.
The French call the tax Les GAFA — the acronym for Google, Amazon, Facebook and Apple. France has accused GAFA of paying insufficient income tax.
The measure is close to passing both houses of Parliament and will soon be signed by President Emmanuel Macron, who has voiced support for the tax.
Austria, Italy, New Zealand, Poland, and the Czech Republic are also considering imposing digital services taxes against U.S. tech companies.
Governments in the EU are starving for money as they grapple with their socialist budgets. The profitable U.S. tech industry is increasingly looking like a tasty meal.
What I thought was most interesting is Amazon has praised the Trump Administration for opening an investigation into what France is doing. “We applaud the Trump Administration for taking decisive action against France and for signaling to all of America’s trading partners that the U.S. government will not acquiesce to tax and trade policies that discriminate against American businesses,” Amazon said.
Google had less praise for the Trump Administration and simply defended its global tax payments and voiced support for a new “comprehensive and multilateral agreement” on tax, rather than “discriminatory unilateral taxes.”
No stocks in FAAG meet the minimum requirements to be included in the GST portfolio. What really eliminates these stocks is once again the valuation and how much we would have to overpay to take an entry in anyone of these names.
Disclosure: I don’t hold any FAAG stocks.