France and other countries view digital service taxes as a way to raise revenue from the local operations of big tech companies which they say profit enormously from local markets while making only limited contributions to public funds, however a recent U.S. Section 301 probe concluded that the French tax discriminates against U.S. tech firms such as Google, Facebook and Apple Inc.
The United States has initiated similar Section 301 investigations of digital services taxes adopted or being considered by 10 other countries, which could result in tariffs against their goods as well.
OECD talks aimed at developing a multilateral solution for taxing digital services have failed to produce any results, with negotiations complicated by the coronavirus pandemic. The Trump administration said it would hold off on implementing the tariffs for up to 180 days.