The punitive taxes on French-made goods are retaliation for France imposing a digital service tax in July, which the US believes to be discriminatory against tech giants like Google, Facebook, Apple, and Amazon. Agnes Pannier-Runacher, France’s junior economy minister, said Paris should not reverse its taxation rules because they make economic sense.

“We need to be pugnacious on the subject,” she told Sud Radio.

French Finance Minister Bruno Le Maire called the tariff threat “unacceptable”, especially since they target “one of [America’s] main allies and Europe in general.”

“In case of new American sanctions, the European Union would be ready to riposte,” he told Radio Classique.

The French tax is meant to address the situation in which large foreign firms can generate revenue in the French market and declare it as profit in whatever jurisdiction their headquarters are located in, paying little to no corporate taxes. The three-percent levy imposed retroactively is expected to contribute about €400 million ($443 million) this year.

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