Trump told NY Post he will impose 100% tariffs on French wine unless France drops its 3% digital services tax. Threat comes ahead of G7 summit. French wine exports to the US total about $2B annually.
President Donald Trump warned France it must scrap a 3% digital services tax or face 100% tariffs on its wine and champagne exports to the U.S., the New York Post reported Monday. Trump made the threat ahead of this week's G7 summit in Évian-les-Bains.
"I asked [President Macron] not to charge American companies, and if they do, I have no choice but to charge a 100% tariff on all champagnes and all wines coming out of France," Trump told the Post.
The digital services tax, approved by French lawmakers in 2019, imposes a 3% levy on gross revenue generated in France by large technology companies – including Amazon, Meta and Alphabet. French wine exports to the U.S. account for roughly one-fifth of the industry's global sales, about $2 billion annually.
The G7 summit runs through Friday. If France holds the line on the tax, Trump's tariff threat could hit French wine producers hard. A 100% tariff would roughly double the cost of a bottle of French champagne or wine at U.S. import, likely cutting demand significantly, traders said.
French officials have previously defended the tax as a way to ensure tech giants pay tax on revenue earned in the country, calling it a fairness measure. The U.S. has long opposed the levy, arguing it unfairly targets American companies.
For investors, the exposure runs through META stock page – Meta faces an annual DST bill in France that analysts estimate in the tens of millions of euros. Amazon and Alphabet also pay. A resolution at the G7 could remove that cost uncertainty.
A French concession – delaying or modifying the tax – would remove the tariff risk and boost wine exporters' shares. An escalation – France refusing to budge and Trump following through – would hammer French wine stocks and could widen the trade dispute to other European tech taxes.
The U.S. Trade Representative's office has previously threatened tariffs on $2.4 billion of French goods in response to the DST, including cheese, handbags and cosmetics. That case remains unresolved.
No further details on the G7 agenda were released.
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