Tariffs

French Finance Minister Bruno Le Maire is keeping Europe on course for a trade battle with the U.S. over the taxation of tech giants like Facebook and Alphabet Inc.’s Google.

International negotiations on new tax rules for the digital age will fail to conclude this year, raising the risk of a transatlantic trade conflict and a proliferation of contentious national levies on global tech giants.

President Donald Trump said he’ll punish American companies that move jobs abroad and reward firms with tax breaks for shifting work from China to the U.S., proposals aimed at hastening the decoupling of the world’s largest economies.

The European Union may delay digital tax proposals to give countries move time to hammer out a deal and avert a transatlantic trade war, a top official from the bloc said.

France held firm on its plans to resume collection of a national digital tax that hits technology giants including Amazon.com Inc., Alphabet Inc.’s Google and Facebook Inc., saying it wouldn’t be swayed by threats of U.S. sanctions.

Italy and Spain also offered to limit the scope of a proposed global digital tax, a concession after the U.S. threatened to hit countries with tariffs if they moved ahead with levies on tech companies.

Treasury Secretary Steven Mnuchin withdrew the U.S. from international talks over a digital tax deal after failing to reach an agreement with countries looking to place levies on the revenue of American tech companies, U.S. Trade Representative Robert Lighthizer said.

The Trump administration is starting investigations into digital services taxes considered by several trading partners from the European Union to India that could lead to tariffs being imposed on the countries’ exports to the U.S.

Even as France indicated a willingness to postpone a disputed tax on technology companies, U.S. Treasury Secretary Steven Mnuchin dangled the prospect of retaliatory tariffs on automobile imports if the issue isn’t resolved.

Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year.