Trump's threat to slap 100% tariffs on French wine unless Paris scraps its 3% digital tax sets up a G7 showdown and hits luxury goods, US tech stocks.
President Trump warned France in an interview with The Post that unless Paris axes its digital services tax on American tech companies, the US will impose 100% tariffs on French wines. The threat revives a 2019 trade dispute and sets the stage for a confrontation at Monday's G7 summit in Évian-les-Bains.
France's 3% levy, known as the GAFAM tax, targets gross revenue from digital services. It hits US giants like Alphabet, Amazon, Meta, and Apple. The French finance ministry said the tax collected roughly $700 million last year. In October, the National Assembly voted 296-58 to double the rate to 6% and narrow the threshold to the largest global players. Ministers vetoed the move.
Trump said he told outgoing French President Emmanuel Macron directly: "All he has to do is get rid of the sales tax, and he wouldn't have that kind of pressure." The 100% tariff level was first proposed by the US Trade Representative during a 2019 investigation into the French tax. Trump added that unless the levy is scrapped, the US will "have no choice" but to apply the duties.
The ultimatum contradicts claims by Macron's office that the issue was settled. A US official dismissed that account as "not accurate." The White House pointed to a February 2025 presidential memo stating American businesses would no longer "prop up failed foreign economies through extortive fines and taxes." The memo tasked US Trade Representative Jamieson Greer and the Treasury Department with deciding whether to reopen a formal probe into the French levy.
France's aggressive stance isolates it from several allies. Canada shelved its digital tax in 2025 after the US broke off trade talks. Italy is reportedly weighing a repeal of its levy. Britain has retained its digital services tax under its current trade arrangements with America.
For US tech companies, the tax directly hits revenue. For French wine exporters, the US market accounts for a fifth of global sales, worth over $2 billion annually. A 100% tariff would make French wine roughly twice as expensive for US consumers, hitting luxury goods and the broader French economy.
The G7 summit runs until Wednesday. The outcome will determine whether the dispute escalates or a truce emerges. Trump's threat is the latest in a series of trade actions targeting European digital taxes. The US Trade Representative and Treasury Department have been tasked with deciding whether to reopen a formal probe into the French levy.
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