The President is revisiting France’s three percent digital tax imposed during his first administration.
Ahead of the G7 conference in France, Donald Trump is once again threatening massive tariffs on France if it doesn’t remove its three percent digital tax on US tech companies. “I asked [French President Emmanuel Macron] not to charge American companies, and if they do, I have no choice but to charge a 100 percent tariff on all champagnes and all wines coming out of France,” the President told The New York Post.
The news may come as a surprise to the French government and wine industry, as sources close to Macron recently said that the issue “was no longer up for debate,” according to the Post. It’s likely to become a point of contention at the G7, as the French government probably won’t repeal the tax.
France’s “GAFAM” tax (Google, Apple, Facebook, Amazon and Microsoft) is on gross, not net revenue earned by those tech giants. Imposed in 2019 as part of a deal with the first Trump administration, it takes in around $700 million per year in revenue. France’s 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 that was vetoed by ministers over the risk of US reprisals. Eliminating the tax would be a political gamble in France, as a large chunk of voters in the nation are concerned about a dependance on US tech.
Trump is increasingly seen as an attack dog for big tech, using tariffs as a cudgel to force nations to drop digital taxes and levies. US companies have also urged Trump to punish nations like Australia over social media bans and the use of news media in search results. Canada, for one, repealed its digital tax in 2025 following pressure from the Trump administration. Other blocs have resisted, though, including the UK which has retained its own two percent digital services tax.
The US President often makes tariff threats, so the latest could be another “Taco” bluff designed to extract concessions in other areas. And if the wine levy was applied, it could be quickly slapped down in a trade court like Trump’s previous tariffs. Still, it will no doubt precipitate one or more sit-down sessions between the US and French heads of state.
