US President Donald Trump threatened to slap a 100% tariff on French wine and champagne unless Paris removes its digital services tax on tech firms, the New York Post reported today.
France imposed in 2019 a 3% levy on the revenues earned by technology firms – including US giants such as Facebook, Amazon, Apple and Google parent Alphabet – within the country’s borders.
French President Emmanuel Macron is due to host Trump today before the G7 summit gets underway at the spa resort of Evian on Lake Geneva.
Trump said he asked Macron “not to charge American companies,” according to the New York Post.
“If they do, I have no choice but to charge a 100% tariff on all champagnes and all wines coming out of France,” Trump was quoted as saying.
“All (Macron) has to do is get rid of the sales tax, and he wouldn’t have that kind of pressure,” he added.
The US is the biggest importing country for French wines and spirits, accounting for 21% of the overall export market last year, French Federation of Wine and Spirits Exporters.
French and European wines exported to the United States already face a 15% tariff – up from an earlier 10%.
The export of French wines and spirits to the US slumped by 21% last year, according to the French exporters federation.
In January, Trump threatened 200% tariffs on French wine over France’s intention to decline an invitation to join his “Board of Peace” aimed at resolving international conflicts.
Canada decided to scrap its digital services tax last year in order to salvage trade talks with the US, following pressure from Trump.
Proponents for special taxes on big tech firms argue that the goal is to force them to pay taxes where they carry out business, as well as to counter the tax optimisation strategies.
During his first term, Trump also threatened to slap tariffs on US imports of champagne and French cheese after France rolled out its digital services tax in 2019.
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