Presidents Emmanuel Macron and Donald Trump have agreed to extend till the end of the year negotiations on a dispute over a French tax targeting online giants, postponing Washington’s threat of sanctions, French officials said Tuesday.
French Finance Minister Bruno Le Maire, speaking before a Brussels meeting with EU counterparts, said: “Macron and Trump had a very constructive discussion… and they agreed to avoid all escalation between the US and France on this digital tax issue”.
A French diplomatic source said the French and US leaders, who spoke by telephone on Sunday, agreed to give negotiations a chance to “find a solution in an international framework” and avoid “a trade war that will benefit no one”.
Macron tweeted Monday that he had had a “great discussion” with Trump on the issue. “We will work together on a good agreement to avoid tariff escalation,” he said.
“Excellent!” replied Trump on Twitter.
The White House said the two men spoke and “agreed it is important to complete successful negotiations on the digital services tax, and they also discussed other bilateral issues”.
Trump said Tuesday that he was “very happy with the result”.
The dispute began last year when Paris approved a levy of up to three percent on revenues earned by tech companies in France, as international efforts dragged on to find a new model for taxing revenues earned via online sales and advertising.
Tech companies often pay little tax in countries in which they are not physically present.
Washington said the tax singled out US companies such as Google, Apple, Facebook, Amazon and Netflix. It threatened retaliatory duties of up to 100 percent of the value of French imports of such emblematic goods as Champagne and Camembert cheese.
The European Union had said it would back France if such tariffs were levied, raising the prospect of a transatlantic trade war.
Jan22,2020: Asian stock markets slumped Tuesday as a SARS-like virus taking hold in China spooked investors, while sentiment suffered a knock also from a credit-ratings downgrade to major financial hub Hong Kong, analysts said.
Most European and US markets followed Asia lower after Hong Kong slumped 2.8 percent by the close and Shanghai ended with a loss of 1.4 percent.
Moody’s has lowered its credit rating on Hong Kong, which has likely fallen into recession owing to the unrest as well as the China-US trade war.
Meanwhile, jitters on trading floors saw investors also shift out of higher-yielding, riskier currencies with the dollar up against the South Korean won, the Australian dollar and the Indonesian rupiah, among others.
But the greenback retreated against the haven currency yen, while gold, another go-to asset in times of uncertainty, gained in Asian trading.
The pound climbed against the dollar and euro as official data showed British unemployment is unchanged at 3.8 percent, reducing the likelihood of the Bank of England cutting rates next week according to analysts.
In stocks trading, “the FTSE 100 was lower… taking its cue from selling in Asia amid growing concern about the coronavirus in China,” said AJ Bell investment director Russ Mould.
“The markets will be watching nervously amid reports the deadly virus has spread to neighbouring countries, with all the potential economic disruption that could cause.”
The number of people in China infected by a new SARS-like virus jumped to 291 on Tuesday, according to authorities.
The virus has so far killed six people, and more than 900 are under medical observation, said the National Health Commission.
The new coronavirus strain has caused alarm because of its connection to Severe Acute Respiratory Syndrome (SARS), which killed nearly 650 people across mainland China and Hong Kong in 2002-03.
KATHMANDU 21,2020: Eight Indian tourists including four children died of suspected suffocation in a hotel in Nepal on Tuesday, police said, after trying to keep warm by using a gas heater during the night.
The victims were staying in Daman, a hill resort south of Kathmandu which is known for its panoramic views of the Himalayas.
“They had lit a gas heater to keep the room warm and probably suffocated,” police official Hobindra Bogati told Reuters. Seven other tourists in the group were unharmed.