Donald Trump has handed France an ultimatum days before the two countries meet at the G7: eliminate the digital tax on American tech companies or risk a 100% tariff on French wine and champagne in the US market. He delivered the warning in an exclusive interview with the New York Post, framing it as a corner he has been backed into rather than a choice.
"I asked him 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 said. He added that French President Emmanuel Macron could lift the pressure simply by dropping what Trump called the "sales tax."
Timing and Contradictions
The timing is pointed. Trump issued the warning hours before he and Macron were scheduled to meet at the G7 summit in Évian-les-Bains, on the shores of Lake Geneva. It directly contradicts what Macron's office floated last week—that the long-running tax dispute between Washington and Paris had quietly been resolved. A senior French source had called the issue "no longer up for debate," a claim a US official immediately dismissed as inaccurate.
What France's Digital Tax Actually Does
At the center of the fight is France's 3% levy, introduced in 2019 and commonly known as the GAFAM tax. It targets gross revenue earned within the country by tech giants like Alphabet, Amazon, Meta, and Apple. Because it taxes revenue rather than profit, it hits US firms hardest—many of which book slim local margins—pulling in roughly $700 million last year, according to the French finance ministry.
The pressure has only grown since. In October, France's National Assembly voted 296-58 to double the rate to 6% and narrow it to target only the largest global players, though ministers ultimately vetoed the move over fears of American retaliation. Lawmakers had even floated a punitive 15% rate before scaling back under industry pushback.
The 100% figure is not arbitrary. It revives a tariff level the US Trade Representative first proposed during a 2019 investigation into the same tax, a fight Macron and Trump defused with an eleventh-hour truce back then.
Why Wine Is Caught in the Crossfire
The US is the single biggest buyer of French wines and spirits, accounting for about 21% of total exports, so the threat strikes a real nerve. According to Reuters, French exporters' group FEVS called the move bad news for an export-heavy industry caught in a dispute beyond its control, urging "responsible behaviour" from both sides.
Macron, for his part, is not backing down. He told French broadcaster TF1 that tariffs help no one, "especially tariffs between G7 countries," and flatly rejected the idea of conceding: "No, because that is not how it works." French wine exports to the US already fell sharply last year and carry a 15% tariff—doubling that to 100% would all but shut them out.
