The president is reconsidering France’s three percent digital tax imposed during his first administration.
Ahead of the G7 summit in France, Donald Trump is once again threatening to impose massive tariffs on France if it does not remove its three percent digital tax on US tech companies. “I asked [French President Emmanuel Macron] The president said, “I will not charge American companies, and if they do, I have no choice but to impose a 100 percent tariff on all champagne and all wine coming from France.” New York Post.
The news may come as a surprise to the French government and the wine industry, as sources close to Macron recently said the issue was “no longer up for debate”. Post. This is likely to become a point of contention at the G7, as the French government will probably not repeal the tax.
France’s “GAFAM” tax is on gross, not net, revenues earned by those tech giants (Google, Apple, Facebook, Amazon and Microsoft). First imposed in 2019 as part of a deal with the Trump administration, it takes in about $700 million in revenue per year. French wine and champagne sales in the US are worth at least $2 billion.
France’s lower house recently voted to double the digital tax to six percent, but ministers vetoed it because of the risk of US retaliation. Eliminating the tax would be a political gamble in France, as a large portion of voters in the country are concerned about dependence on American technology.
Trump is increasingly seen as an attack dog for big tech, using tariffs to force countries to abandon digital taxes and levies. US companies have also urged Trump to punish countries such as Australia over restrictions on social media and the use of news media in search results. Following pressure from the Trump administration, Canada canceled its digital tax in 2025. However, other factions have objected, including the UK which has retained its two percent digital services tax.
The US President frequently makes threats of tariffs, so the latest may be another “taco” bluff designed to extract concessions in other areas. And if a wine levy were implemented, it could be quickly struck down in trade court, like Trump’s previous tariffs. Nevertheless, there is no doubt that this will lead to one or more meeting sessions between the US and French heads of state.
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