France Digital Services Tax tariffs (never collected)

In 2019, France adopted a Digital Services Tax (DST) — a 3% levy on revenue from large digital companies, which in practice hit U.S. tech giants hardest. USTR opened a Section 301 investigation and in July 2020 issued a formal Notice of Action finding the French DST unreasonable, discriminatory and a burden on U.S. commerce.

The threatened response was a 25% tariff on about $1.3 billion of French goods — cosmetics, handbags, soap and other products chosen for political visibility. Implementation was deferred for 180 days to allow OECD-level tax negotiations, with the tariffs scheduled to begin January 6, 2021. On January 7, 2021 — one day after the scheduled start — USTR announced the action was indefinitely suspended, citing the ongoing OECD talks.

Not a single dollar of the French DST tariff was ever collected, and in October 2021 the U.S. reached an agreement with France and several other European governments tied to the broader OECD/G20 global tax deal, effectively resolving the dispute. That makes this a clean rescinded case: announced, scheduled, deferred, then suspended indefinitely and never imposed.

Why it matters: this is the textbook example of a tariff used as a negotiating weapon rather than a revenue or protection tool. The threat of 25% on French lipstick was leverage in an argument about how to tax Google and Meta.

Directly: No one — the tariff never took effect

Ultimately: No one, for this action

Had it been imposed, U.S. importers of French cosmetics and luxury goods would have paid, with costs passed to shoppers at department and drug stores.