Transatlantic trade relations are still tense

AS RECENTLY AS a week ago, a big transatlantic bust-up seemed inevitable, with the annual meeting of the World Economic Forum at Davos in Switzerland the most likely boxing ring. America had taken offence at France’s digital-services tax, which hits the likes of Amazon, Facebook and Google, on the ground that it discriminates against American companies. The French had insisted that the tax was only a temporary measure and would be repealed as soon as governments were able to reach a multilateral agreement on tax reform. The Americans, unconvinced, were poised to whack duties on $2.4bn of French champagne, beauty products and handbags.

But then on January 19th America’s president, Donald Trump, struck a temporary truce with his French counterpart, Emmanuel Macron. France would suspend the collection of revenues from its tech tax, and the Americans would suspend their tariff threats.

A love-in at Davos, then? Not quite. Soon after the apparent ceasefire, tensions began to rise again. The elite assembled at the Swiss resort were treated to plenty of theatrics. Steven Mnuchin, America’s treasury secretary, warned the British government that its version of a digital-services tax would not escape punishment. When Sajid Javid, the British chancellor of the exchequer, informed the audience that Britain would prioritise a trade...