Trump threatens to impose 100% tariff on French wines
What's the story
US President Donald Trump has threatened to impose a 100% tariff on French wines if France does not remove its digital tax on American tech giants. The warning was directly given to French President Emmanuel Macron, Trump said during an exclusive interview with The New York Post. "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."
Trade tensions
Trump's comments contradict Macron's office's claims
The ultimatum has set the stage for a major confrontation at the G7 summit in Evian-les-Bains. This annual meeting of seven wealthy democracies is meant to establish rules on global trade, security, and economic policy. Trump's comments also contradict claims made by Macron's office last week that they had quietly resolved their long-standing dispute over taxing Silicon Valley.
Tax details
France's digital services tax
France's digital services tax, or GAFAM tax, has been in place since 2019. It imposes a 3% levy on the local revenue generated by companies like Google parent Alphabet, Amazon, Meta, and Apple. The policy targets gross revenue instead of profits and has hit US tech giants the hardest. Last year alone, it collected around $700 million according to the French finance ministry.
Tax hike
Move vetoed by ministers
In October, France's National Assembly voted to double the tax to 6% and narrow the threshold to target only the biggest global players. This move was vetoed by ministers. However, Trump's latest threat resurrects the punitive 100% tariff level first proposed by the US Trade Representative during a 2019 investigation into French tax.
International response
France's aggressive tax hike has isolated it from several allies
France's aggressive tax hike has isolated it from several key allies who have bowed to Washington's pressure. Canada shelved its own digital tax in 2025 after the US broke off trade talks, while Italy is reportedly considering repealing its levy. However, UK has kept its digital services tax under current trade arrangements with US.