President Donald Trump has warned France that it could face a fresh trade battle with the United States unless it abandons its digital services tax on major American technology companies.
In an interview with the New York Post, Trump said he personally delivered the message to French President Emmanuel Macron, making clear that continued taxation of American tech giants could trigger steep tariffs on French wine and champagne exports.
“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,” Trump said. “All [Macron] has to do is get rid of the sales tax, and he wouldn’t have that kind of pressure.”
The threat sets up a potentially contentious dispute ahead of this week’s G7 summit in Évian-les-Bains, France, where leaders of the world’s largest advanced economies are expected to discuss trade, security, and economic policy.
Trump’s comments also appear to contradict recent claims from French officials that the long-running disagreement over digital taxation had largely been resolved.
Last week, a senior source within Macron’s administration reportedly told journalists that the issue was “no longer up for debate” among G7 nations. However, American officials challenged that characterization.
At the center of the dispute is France’s digital services tax, often referred to as the “GAFAM tax,” a reference to Google, Apple, Facebook, Amazon and Microsoft. First enacted in 2019, the measure imposes a 3% levy on revenue generated in France by large technology companies.
Unlike traditional corporate taxes, the French levy applies to revenue rather than profits, meaning it disproportionately affects large multinational technology firms—many of which are American.
According to France’s Finance Ministry, the tax generated approximately $700 million in revenue last year.
The controversy intensified in late 2025 when France’s National Assembly voted overwhelmingly in favor of legislation that would have doubled the tax rate to 6% and narrowed its application to the world’s largest technology firms. Although the proposal was ultimately vetoed by government ministers, it signaled growing support among French lawmakers for tougher measures targeting major tech companies.
At one point, lawmakers reportedly considered raising the rate as high as 15% before scaling back the proposal amid concerns about retaliation from Washington.
Those concerns now appear increasingly relevant as the Trump administration adopts a more aggressive stance toward foreign governments imposing taxes or regulatory measures that disproportionately affect American companies.
White House spokesman Kush Desai pointed to a February 2025 presidential memorandum directing federal agencies to examine what the administration described as discriminatory foreign taxes on American businesses.
The memo stated that American companies should no longer be forced to “prop up failed foreign economies through extortive fines and taxes.”
As part of that directive, U.S. Trade Representative Jamieson Greer and the Treasury Department were tasked with evaluating whether to reopen formal investigations into France’s digital taxation.
Trump’s latest warning revives a tariff threat first raised during his previous administration. In 2019, the Office of the U.S. Trade Representative proposed imposing 100% tariffs on certain French products after concluding that the digital services tax unfairly targeted American firms. Those tariffs were ultimately suspended following negotiations between Washington and Paris.
The stakes are significant for France’s wine industry. The United States represents one of the country’s largest export markets, accounting for roughly one-fifth of French wine exports worldwide and generating more than $2 billion in annual sales.
Industry analysts warn that a 100% tariff could dramatically increase prices for American consumers while inflicting substantial damage on French producers.
France is not the only country facing pressure from Washington over digital taxation policies. Canada suspended its own digital services tax in 2025 after trade negotiations with the United States broke down. Italy has reportedly considered repealing its levy amid concerns about possible economic retaliation.
The United Kingdom, however, continues to maintain its digital services tax under its current trade arrangements with the United States.
The dispute highlights a broader debate over how multinational technology companies should be taxed in an increasingly digital global economy.
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