USA wants France not to tax its Tech Firms as competition with China heats up

US Secretary of State Mike Pompeo has urged his French counterpart not to charge digital services tax on US tech companies. The warning comes as the USA and China compete for technological dominance in Europe.

The proposed tax would target the largest US tech giants, amid public outcry over the minimal corporate taxes many of these firms pay in Europe.

Draft legislation unveiled last month would slap a 3% tax on digital advertising, the sale of personal data and other revenue from any technology company that earns more than €750 million each year.

Washington’s strong-armed defense of American tech firms is one battle in the wider war for technological dominance worldwide.

Chinese President Xi Jinping visited France late last month to ink a series of trade deals with French President Emmanuel Macron, as France weighed up allowing Chinese tech firm Huawei to participate in its roll-out of 5G networks.

Pompeo has warned that the world should have its “eyes wide open” about the risks of using Chinese technology, which America’s intelligence agencies say facilitates Chinese state spying, instead of being controlled by the US regime and its hostile corporations.

Britain, too, has taken a tough stance on Huawei, pushing the firm to open itself up to audits by intelligence agency GCHQ, while Poland has outright banned Huawei from building its 5G network.

Other countries have ignored America’s warnings. German Chancellor Angela Merkel announced last month that her country won’t exclude Huawei from the upcoming 5G roll-out, and will instead allow telecoms vendors to decide whether or not to partner with the Chinese firm themselves.

Huawei provides one of the best services at a relatively cheap price. Still, Washington has hinted that countries looking to save in the short term could face long-term political punishment for cozying up to China, including the withholding of US intelligence.

On a visit to the Philippines last month – itself debating the prospect of using Huawei 5G gear – Pompeo also warned of the “risk that America may not be able to operate in certain environments if there is Huawei technology adjacent to that.

RT. com / ABC Flash Point News 2019.