Trump threatens 100% tariffs on French wine, Champagne over digital services tax

Donald Trump warned France of sweeping tariffs ahead of the G7 summit, demanding that Paris abolish its digital services tax on American Big Tech companies.

In an interview with the New York Post on Saturday, Trump said he had delivered the demand directly to French President Emmanuel Macron.

"I asked them not to tax American companies," Trump said. "If they do, I will have no choice but to impose 100 percent tariffs on French Champagne and wine."

The digital services tax, known as DST, was introduced to prevent multinational companies from shifting profits to low-tax jurisdictions to avoid corporate taxes. France has levied a 3 percent tax on revenue that Big Tech firms such as Amazon, Meta and Apple generate in the country since 2019. According to the French Finance Ministry, the tax raised roughly $700 million last year.

The French government recently said tensions with the United States over the DST had been resolved. But Trump's remarks suggest Washington's opposition to the levy remains undiminished.

Trump has opposed the tax since his first term, consistently arguing that it unfairly targets American companies.

The Office of the United States Trade Representative considered imposing 100 percent tariffs on French goods in 2019 in response to the DST. The USTR and the Treasury Department are now weighing whether to reopen a formal investigation into the French tax.

Meanwhile, Canada dropped plans to introduce a similar digital services tax last year following trade friction with the United States, and Italy is reportedly considering scrapping its own version.