Trump Just Picked Another Fight With Macron

(Bloomberg) --

As the U.S.’s first and oldest ally, France has had its ups and downs with Washington since their treaty of 1778.

The Trump administration's latest actions treat France more like an enemy, and risk sending relations with President Emmanuel Macron to a new low.

The U.S. is to investigate French plans to tax technology giants like Facebook and Amazon over concerns the move “unfairly targets American companies.” That’s the same grounds used to impose tariffs on China.

The move may wrong-foot the European Union, with its leadership in transition and already shaken by President Donald Trump’s threat of 25% tariffs on car exports. It also drives a wedge between Berlin and Paris, since auto giant Germany is keen to move ahead with talks on a limited U.S.-EU trade deal that are stalled amid French opposition to including agriculture in any accord.

What’s more, Trump has options to skirt the EU and hit France over the digital tax, which is expected to pass the Senate in Paris today. One proposal would double tax rates for French citizens and companies in the U.S.

The standoff makes for difficult discussions among Group of Seven finance ministers next week, then G-7 leaders next month. The host? France.

Global Headlines

Gulf standoff | The U.K.'s Royal Navy intervened to stop Iranian vessels blocking a British oil tanker from leaving the Persian Gulf, heightening friction just as European nations scramble to salvage a landmark nuclear accord. The incident comes after U.K. forces seized a tanker off Gibraltar that was suspected of carrying Iranian oil to Syria. The tensions complicate efforts to contain a crisis over Iran’s compliance with the nuclear accord after Trump unilaterally pulled the U.S. out of the deal last year.

Warren's pitch | Democratic presidential contender Elizabeth Warren’s trademark pitch of her personal story blended with detailed policy proposals has helped her win over white liberals. Now, she hopes her message will resonate with African Americans, a crucial Democratic constituency that will play a large role in deciding who will challenge Trump next year. She's trying to avoid missteps made by her chief progressive rival, Bernie Sanders, that helped doom his 2016 campaign.

• Click here for up-to-the-minute news and analysis on the 2020 race.

Hurdle cleared | Lawmakers in Brazil’s lower house voted to reform the pension system, potentially unlocking big budgetary savings and establishing a minimum retirement age. While the bill faces other legislative obstacles, it’s a win for President Jair Bolsonaro, who campaigned on tackling the pension issue but faced months of administration infighting and a hostile opposition. Sao Paulo state governor Joao Doria told Bloomberg it was a good step but more was needed to pull Brazil’s economy out of three years of sluggish growth.

Pointed message | Trump administration officials signaled support for pro-democracy protesters in Hong Kong – and defiance toward the Chinese government – by granting high-level meetings to a Hong Kong publisher who has drawn Beijing’s ire. Jimmy Lai, a democracy advocate, met this week with National Security Advisor John Bolton, Vice President Mike Pence, Secretary of State Michael Pompeo and a trio of Senate Republicans.

Boycotts and Bickering | Japan and South Korea plan their first talks tomorrow since Tokyo slapped export restrictions last week on specialist materials vital for its neighbor's tech sector. There is not much political incentive for a climb down on either side to the countries' worst spat in years, Isabel Reynolds and Jihye Lee report, while simmering anger in South Korea is lending momentum to a movement to boycott Japanese goods.

What to Watch

• Turkey is set to take delivery of Russia's S-400 missile-defense system any day now, despite U.S. warnings.
• All eyes in Berlin will be on Chancellor Angela Merkel’s public appearance today after a recent series of shaking attacks that have prompted media questions over her assertion that she is fine.
• Federal Reserve Chairman Jerome Powell told U.S. House lawmakers he wouldn’t step down if Trump attempts to fire him, saying it’s “essential” the central bank “maintains its independence from the executive branch.” He’s scheduled to appear today before a Senate panel.
• The White House is holding a closed-door social media summit today that’s short on social media companies and long on fringe conservative voices that back up Trump’s claims of being silenced online.

And finally....Partisan accusations over U.S. border security and migrants’ rights were briefly silenced yesterday as a grieving mother told House lawmakers how her 2-year-old daughter Mariee grew sick and died after detention by Immigration and Customs Enforcement. Yazmin Juárez tearfully recounted their journey from Guatemala to Texas, where she said they slept on the floor and were “locked in a cage with about 30 other people.” Juárez said she fled Guatemala to seek a better life for her child. Instead, she watched her die “slowly and painfully.”

--With assistance from Rosalind Mathieson and Jon Herskovitz.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net, Kathleen Hunter

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