President Donald Trump warned France on Monday that the United States will impose a 100% tariff on French wine and champagne if President Emmanuel Macron does not end the country's digital services tax on American technology companies. The threat comes just hours before the Group of Seven (G7) summit begins in France, where both leaders are expected to discuss the issue face-to-face.
President Trump told the New York Post that he directly urged President Macron to remove the three percent levy, which targets large digital companies, many of which are based in the U.S. "All [Macron] has to do is get rid of the sales tax, and he wouldn't have that kind of pressure," Trump said. He added that without action from France, "I have no choice but to charge a 100% tariff on all champagnes and all wines coming out of France."
France has enforced the digital services tax since 2019, applying it to companies with more than €25 million in French revenue and €750 million globally. The tax, often called the GAFAM tax, generated around $700 million last year and mainly impacts major Silicon Valley firms like Amazon, Apple, and Meta.
President Macron responded to the threat on French television channel TF1, saying, "Tariffs don't do anyone any good, especially tariffs between G7 countries." When asked if he would back down, Macron stated, "No, because that is not how it works," as reported by Reuters.
Currently, French wines and spirits face a 15% tariff when exported to the U.S., though French producers have been lobbying to reduce this rate. President Trump has made similar tariff threats in the past, including a 200% tariff proposed earlier this year in a separate dispute.
The digital tax remains a point of tension, with the U.S. government arguing it unfairly targets American tech giants, while France contends that global tech companies must pay taxes proportional to their activity in the country.
The dispute is set to be a key topic during the G7 summit, which begins Monday and runs through Wednesday. With President Macron's second and final term ending next year, the outcome of these talks could have lasting implications for U.S.-France trade relations and the broader tech industry.
