The Trump administration on Friday announced plans to impose 25 percent tariffs on about $1.3 billion worth of French products in response to the country's digital service tax that impacts major US technology companies.
Countries have been negotiating an global standard for taxing digital services via talks at the Organization for Economic Cooperation and Development, a group of 37 advanced economies.
The US Trade Representative's office said that resolving the issue may be done through discussions in the Organisation for Economic Co-operation and Development (OECD).More news: Singapore's ruling party seen retaining power, but opponents make gains
U.S. Trade Representative Robert Lighthizer first disclosed on Thursday plans to impose new tariffs on French goods with deferred implementation.
Wine retailers as well as other U.S. importers of French goods had been vocal opposition to individuals potential tariffs, saying they might hurt American companies and the workers.
In response, French Economy and Finance Minister Bruno Le Maire said that "this letter is a provocation towards all the partners at the OECD when we were centimeters away from an agreement".
Washington has been calling for worldwide rules to be set up by the Organization for Economic Cooperation and Development, or OECD.More news: Make U.S. schools reopening guidelines mandatory -Pelosi
The U.S. withdrew last month from worldwide talks over a digital-tax deal after failing to reach an agreement on developing a global levy. An worldwide deal would prevent dozens of countries implementing their own versions of levies.
France has implemented a 3 percent tax on revenues some companies earn from providing goods and services to French users online, regardless of where the companies are physically based. India expanded a levy that it already uses in April. "Sanctions are not a way of operating between countries that are friends, as the USA and France are".
"Both sides need to compromise", he said.
But in January, Paris suspended collection of the tax through the end of the year.More news: Dr. Fauci doesn't weigh 'whole national interest,' coronavirus task force member says
"Retaliatory tariffs aren't ideal but the French government's refusal to back down from its unilateral imposition of unfair and punitive taxes on US companies leaves our government with no choice", said a statement from Sens.