President Donald Trump declared that the United States could impose a 100% tariff on all French wine, including champagne, if France does not repeal its digital services tax levied on American technology giants. Trump framed the threat as a direct response to France’s 3% tax on revenue generated by companies such as Google, Amazon, Apple, and Meta, which he said unfairly targets U.S. businesses.
The digital tax significantly impacts major American tech firms because it is applied to their total sales revenue within France rather than their profits, increasing the financial burden on these companies. The French government’s tax brought in roughly $700 million last year according to the finance ministry, drawing sharp criticism from U.S. officials.
The French digital services tax is often called the GAFAM tax, named after the acronym of major tech firms affected, and has been in place since 2019. Though the French National Assembly proposed doubling the rate to 6%, the idea was rejected by the government. Despite claims from President Macron’s office that the dispute has been settled, U.S. officials insist the conflict remains unresolved.
The threat of tariffs comes ahead of the planned meeting between Presidents Trump and Macron at the G7 Summit in Évian-les-Bains. Trump stressed in an interview that the American wine market’s access to French products, which accounts for roughly one-fifth of the global French wine sales valued at more than $2 billion annually, is at stake. He urged Macron to eliminate the digital tax to avoid severe retaliatory duties on French wines in the U.S. market.