France, EU Ready to Retaliate to US Threat of New Tariffs

French Finance Minister Bruno Le Maire, left, and European Trade Commissioner Phil Hogan attend a media conference after their meeting in Paris, Tuesday, Jan. 7, 2020. (AP Photo/Michel Euler)
French Finance Minister Bruno Le Maire, left, and European Trade Commissioner Phil Hogan attend a media conference after their meeting in Paris, Tuesday, Jan. 7, 2020. (AP Photo/Michel Euler)
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France, EU Ready to Retaliate to US Threat of New Tariffs

French Finance Minister Bruno Le Maire, left, and European Trade Commissioner Phil Hogan attend a media conference after their meeting in Paris, Tuesday, Jan. 7, 2020. (AP Photo/Michel Euler)
French Finance Minister Bruno Le Maire, left, and European Trade Commissioner Phil Hogan attend a media conference after their meeting in Paris, Tuesday, Jan. 7, 2020. (AP Photo/Michel Euler)

France has warned it will retaliate with the full backing of the European Union if the United States imposes tariffs on up to $2.4 billion worth of French products, including Champagne, Roquefort cheese, handbags, and lipstick.

The US is considering 100% tariffs on some French goods in response to France's decision to tax the local digital business of major tech companies like Google and Facebook. With a decision on the tariffs expected in coming days, French Finance Minister Bruno Le Maire met Tuesday with EU trade chief Phil Hogan in Paris.

"We believe that the American project of sanctions against the French digital tax is unfriendly, inappropriate and illegitimate," Le Maire said.

If US tariffs were to be imposed, "we would bring the case to the World Trade Organization and we would be ready to react," Le Maire said.

Hogan said the question of the digital tax is a "very major bone of contention with the United States."

"The EU commission will stand together with France", he added.

France has since last year been imposing a 3% annual tax on revenues in France of digital companies with yearly global sales worth more than 750 million euros ($830 million) and French revenue exceeding 25 million euros. France is pushing for a global agreement on how to better tax digital operations, which are typically reported in the company's home country instead of the place where it does business.

Asked about potential retaliation measures from France, Le Maire said the country is considering "all options." He did not further elaborate.

The US are expected to announce the potential tariffs by next week, but France called on the Trump administration to refrain from taking a decision while negotiations are ongoing at the Paris-based Organization for Economic Cooperation and Development.

In a phone call with US Treasury Secretary Steven Mnuchin on Monday, Le Maire said the sides had agreed "to intensify efforts in the coming days to try to find a compromise."

In talks with President Donald Trump last August, French President Emmanuel Macron vowed France would abandon its digital tax if an agreement to better tax digital businesses was found at the OECD, which comprises 134 countries.



Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
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Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh

Egypt's central bank left its overnight interest rates unchanged on Thursday, as expected, saying economic growth remained slow but that inflation has been decreasing.
The bank's Monetary Policy Committee (MPC) left the deposit rate at 27.25% and the lending rate at 28.25%.
All but one of 18 analysts in a Reuters poll had expected rates to remain unchanged, with the sole analyst forecasting a cut of 100 basis points (bps).
The decision keeps the overnight deposit rate below that of headline inflation, which was 27.5% in June. Real interest rates have been negative since January 2022. Inflation declined in June for a fourth straight month after soaring to a record 38% in September.
The MPC expects inflation to come down sharply in the first half of 2025.
"The gradual unwinding of food inflation along with the improvement of inflation expectations suggest that inflation is on a sustained downward trajectory," the MPC said.
Gross domestic product inched down to an annualized 2.2% in the first quarter from 2.3% in the final quarter of 2023, the MPC added.
"Leading indicators for Q2 2024 suggest that economic activity remains subdued. Consequently, real GDP growth is expected to slow down in FY 2023/24 compared to the previous fiscal year, before recovering in FY 2024/25," it said.
Egypt reported GDP of 3.8% in 2022/23.
The central bank raised interest rates by 600 bps on March 6 as part of an agreement with the IMF, bringing total increases since the beginning of the year to 800 bps. Egypt also sharply devalued its currency against the dollar under its IMF accord.