President Donald Trump threatened Earlier this week to slap a 100% tariff on all French wine and champagne unless France scraps the tax it charges large American technology companies, escalating a long-running fight over digital taxation just as he headed to a summit on French soil.
In an interview with the New York Post, Trump said he had taken the warning directly to French President Emmanuel Macron.
“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,” he said, adding that all Macron needs to do is drop the tax.
At the center of the dispute is France’s digital services tax, a 3% levy it introduced in 2019 on the revenue that big technology firms earn within the country.
The tax falls heavily on American giants such as Alphabet, Apple, Meta, Amazon and Microsoft, and because it applies to gross revenue rather than profit, companies pay it even in years they earn little.
Washington has argued for years that the tax unfairly singles out U.S. firms.
Macron showed no sign of backing down.
Speaking from the G7 summit he is hosting in the French Alps, he said it is not for the United States to decide French or European law and made clear the tax would stay as long as he is in office.
With his term ending in 2027, Macron has grown less concerned with pleasing the American president.
For France’s winemakers, though, the threat is serious.
The United States is the single biggest buyer of French wine and spirits, accounting for about 21% of the industry’s exports last year.
French and European wines already face a 15% U.S. tariff, up from 10% earlier, and exports to the United States slumped about 21% last year.
Doubling the price of a bottle with a 100% tariff would deal a heavy blow to an industry already under strain, and French exporters reacted with alarm.
Here is what it would mean closer to home.
A 100% tariff is effectively a doubling of the cost of bringing French wine and champagne into the country, and much of that increase tends to reach the shelf.
A bottle that sells for $40 today could approach $60 or more, hitting American restaurants, importers and shoppers who favor French labels.
In that sense, a tax aimed at protecting U.S. tech companies would land squarely on U.S. wine drinkers.
The clash is part of a much bigger standoff.
Digital services taxes have become a flashpoint between Washington and its trading partners, with the United States arguing they discriminate against American firms that dominate the internet economy.
During Trump’s first term, U.S. trade officials opened formal investigations into France’s tax and proposed similar tariffs.
Last year, Canada scrapped its own digital tax under pressure from Trump to keep trade talks alive, a precedent the administration would surely like France to follow.
So far, France is not following it.
The threat now hangs over the G7 gathering, an awkward backdrop for a meeting meant to project unity among allies.
Whether it becomes a real tariff or remains a negotiating club depends on whether Paris blinks, and for the moment, Macron is holding firm.
American wine lovers, and the businesses that sell to them, will be watching closely.
Évian, France — JBizNews Desk
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