US President Donald Trump threatens French wine as retaliation for digital services tax

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As France prepares to implement a French digital services tax (also targeting American tech giants such as Google, Amazon, Facebook, and Apple), US President Donald Trump wrote in a tweet that France should expect retaliatory measures, particularly regarding its wine.

The French digital services tax, as signed by President Emmanuel Macron, targets companies with at least €750 million in global revenue and digital sales of €25 million in France from certain digital activities, such as targeted advertising and providing platforms to connect buyers and sellers.

On 27 July, President Donald Trump tweeted: “France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!” A few hours after his tweet, US President told the press that his administration will soon announce retaliatory measures and that the American taxes would apply to French products: “it might be on wine, it might be on something else”. For Washington, France’s move is a stringent example of a “lack of commitment” to the international negotiations at the OECD level, since those are still ongoing.

As Donald Trump is expected to meet Emmanuel Macron on 24 August at the occasion of the G7 Summit in Biarritz, France, the French President’s team declared this would be an important opportunity to move towards universal taxation of digital activities and that it is fundamental to keep working on obtaining a broad international deal.

Bruno Le Maire, French Minister of the Economy, also put the emphasis on the French government’s willingness to reach an international agreement, even though – in the meantime – he reaffirmed the country’s decision to move forward with a national digital tax.

As other Member States of the European Union (Austria, United Kingdom, Spain, Italy) have also announced their plans to introduce similar digital taxes on their own territory, G7 Summit talks will most probably focus on finding an international solution regarding digital taxation.

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