In a strategic move to counteract U.S. tariffs imposed by President Donald Trump, French Economy and Finance Minister Eric Lombard has suggested implementing stricter regulations on the data usage of major American technology companies. In his recent interview with Le Journal Du Dimanche, Lombard stated, “We may strengthen certain administrative requirements or regulate the use of data.” This potential regulatory action aims to address the imbalance created by U.S. tariffs while safeguarding the interests of the French economy.
In addition to stricter regulations, Lombard hinted at the possibility of taxing specific activities related to U.S. Big Tech, although he refrained from providing detailed information on what those activities might entail. A spokesperson for the French government previously indicated that the European Union’s response to the tariffs could encompass digital services that are currently untaxed. This proposal, however, received a strong rebuke from Ireland, which is home to the European headquarters of several prominent U.S. tech companies.
European Commission President Ursula von der Leyen has pledged to address the challenges posed by Trump's trade policies, with technology emerging as a critical area for potential retaliation. The European Union currently enjoys a substantial trade surplus of €157 billion in goods, indicating that it exports more than it imports. However, the EU also faces a deficit of €109 billion in services, including the vital sector of digital services.
Lombard expressed concern that the ongoing trade war with Washington could hinder France's efforts to reduce its significant budget deficit. He noted that falling tax revenues could lead to a decline in the country’s gross domestic product (GDP), ultimately exacerbating the deficit. In an interview with BFMTV/RMC, Lombard stated, “Tax revenues would probably fall, and then GDP would fall compared to forecasts, which would worsen the deficit.”
French Prime Minister François Bayrou echoed Lombard's concerns, asserting that Trump's tariffs could lower France’s GDP by over 0.5 percentage points. In an interview with Le Parisien, he emphasized the potential for significant job losses and an economic slowdown, stating, “The risk of job losses is absolutely major, as is that of an economic slowdown and a halt to investment. The consequences will be significant: Trump’s policies could cost us more than 0.5 percent of GDP.”
As France navigates these turbulent economic waters, the government’s proposed measures against U.S. tariffs and Big Tech could play a pivotal role in shaping the future of the French economy and its position in the global market.
