President Trump has signaled that France might face a new trade conflict with the United States, expressing in an interview that unless Paris withdraws its digital taxes on major American tech firms, the U.S. will have “no choice” but to impose a 100% tariff on French wine.
He issued a direct warning to outgoing French President Emmanuel Macron, urging him to eliminate a 3% tech tariff or risk severe tariffs impacting the U.S. market, which represents around a fifth of the French wine sector’s global sales, valued at over $2 billion annually.
“I urged that American firms not face tariffs. If they were to do so, we would need to impose a 100% tariff on all Champagne and wine from France,” Trump remarked. “What [Macron] needs to do is remove the sales tax, though I doubt he will feel the necessary pressure to do so.”
This ultimatum sets the stage for a significant confrontation at the upcoming G7 summit, where leaders of the world’s wealthiest democracies come together to discuss global trade rules, security, and economic policies.
Trump’s comments challenge statements from last week by Macron’s office suggesting that the two nations had come to a resolution regarding the taxation of Silicon Valley. A senior official close to Macron claimed the issue was “no longer on the table,” but U.S. officials swiftly dismissed this assertion as “not accurate.”
France’s digital services tax, often referred to as the GAFAM tax, has been in place since 2019, imposing a notable 3% tax on local revenue from companies like Google’s parent Alphabet, Amazon, Meta, and Apple.
Since this tax is based on total revenue rather than profits, it has impacted major U.S. tech companies most significantly, generating approximately $700 million last year, according to the French Treasury.
In October, France’s National Assembly, which mirrors the House of Commons, voted to double the tax rate to 6% and limit it to only the largest global companies. However, this proposal was eventually vetoed by the cabinet.
Initially, lawmakers proposed a steep 15% hike before dialing it back under industry pressure. The former Economy Minister Laurent Lescure warned that “disproportionate” taxes might provoke “disproportionate” American retaliation.
Now, that retaliation seems to be taking shape. Trump’s latest threat resurrects the 100% tariff level initially suggested by the U.S. Trade Representative during the 2019 investigation into France’s tax policy.
Macron has been noted for his ability to negotiate with Trump effectively before, including securing an agreement at the G7 in Biarritz back in 2019. However, the Trump administration appears to be taking a firmer approach on the global stage now.
When inquired for comment, White House press secretary Khush Desai referenced a presidential memo from February 2025, indicating U.S. companies would no longer “support failing foreign economies through excessive fines and taxes.”
This memo instructed the U.S. Trade Representative and Treasury Department to investigate whether to re-examine French taxation. Neither agency provided comments when requested.
France’s aggressive tax measures have distanced it from several allies who have yielded to U.S. insistence. For instance, Canada plans to postpone its digital tax until 2025 after the U.S. discontinued trade discussions, and Italy is also reportedly weighing the cancellation of its tax.
Conversely, the UK continues to uphold its digital services tax in its trade agreement with the U.S.
The G7 summit is being held in Evian, France, until Wednesday. The group, which includes Canada, France, Germany, Italy, Japan, the UK, and the U.S., dominates global trade and the international financial system. Russia was part of the G8 until its exclusion following the Crimea occupation, and despite China’s significant economy, it has never been a member.
