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France says Europe united against U.S. tariffs as Germany eyes negotiation

Reuters  |  AIX-EN-PROVENCE, France 

By and Pascale Denis

AIX-EN-PROVENCE, (Reuters) - The insisted on Sunday that Washington should expect united retaliation from to further tariff increases after signalled it was prepared to negotiate.

With Germany's powerful facing the threat of higher U.S. duties, said last Thursday she would back a lowering of levies on imports of U.S. cars.

"If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that is a united and sovereign power," French said.

"The question is no longer whether or not there will be a trade war, the war has already started," he added, speaking at an economic conference in Aix-en-Provence, southern

U.S. hit the EU, and with tariffs of 25 percent on and 10 percent on aluminium at the start of June, ending exemptions that had been in place since March.

He further escalated tensions last month with threats to impose a 20 percent import tariff on all EU-assembled vehicles, which could upend the industry's current business model for selling cars in the

"Let it be known that if we are attacked we will react collectively and we will react firmly," Le Maire said.

The currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.

Under rules, the EU cannot lower import tariffs for only U.S.-made cars. It would have to reduce them for all WTO members.

While French carmakers would be little affected by U.S. tariffs because they have little exposure to the American market, they would face stiff competition from Asian producers if EU tariffs were cut, a prospect that worries the

SECOND FRONT

Le Maire also insisted the EU would overcome differences on a tax on digital giants such as and Apple, which have in the past booked European profits in countries with the lowest tax rates.

"Believe me, we will tax the digital giants by the end of 2018 or at the latest in early 2019 because it's not only a question of justice but of sovereignty," Le Maire said.

A joint Franco-German declaration agreed last month by Le Maire and his German counterpart had spoken of an EU agreement for the end of 2018.

has invested considerable political capital in lobbying Paris' EU counterparts to back a 3 percent tax on large firms' digital turnover, in the face of opposition from low-tax countries.

In France, the idea plays well with companies like widely seen as getting away with paying lower taxes than other firms, depriving the state of revenues and putting French firms at a disadvantage.

France's was loudly booed on Saturday at the conference, attended by the CEOs of many of France's biggest companies, when he said his firm had paid average corporate tax of 26 percent over the last 10 years, comfortably below the 33 percent statutory rate in

(Reporting by and Pascale Denis; Editing by and Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, July 08 2018. 19:56 IST
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