Dollar Dips As Trump-Macron Agree On Tariff “Truce” Through Year-End

According to a French diplomat, French President Macron and US President Trump have agreed a truce in their dispute over digital taxes that will mean neither side imposes punitive tariffs this year.

As a reminder, France decided in July to apply a 3% levy on revenue from digital services earned in France by firms with revenues of more than 25 million euros ($28 million) in France and 750 million euros worldwide.

After concluding that the tax on digital revenues – that hits large American tech companies including Google, Apple, Facebook and Amazon.com – unfairly discriminated against US tech companies, the Trump administration had threatened to impose 100% tariffs on up to $2.4 billion of French imports, including champagne.

But, if the diplomat and Macron’s tweet are to be believed, both sides have de-escalated…

“Great discussion with @realDonaldTrump on digital tax,” Macron said in a tweet.

“We will work together on a good agreement to avoid tariff escalation.”

Great discussion with @realDonaldTrump on digital tax. We will work together on a good agreement to avoid tariff escalation.

— Emmanuel Macron (@EmmanuelMacron) January 20, 2020

The dollar dipped back to unchanged on the news…

The two countries will continue negotiations along with their European partners until the end of 2020 in order to agree a global framework that ensures tech companies pay an appropriate amount of tax, the diplomat said.