President Trump has issued an ultimatum to France, threatening to place a 100% tariff on French wines if the country doesn't kill a tax on US big tech that went into effect seven years ago.
The tax in question is France's Digital Services Tax (DST), first announced in December 2019. It applies to any tech company with an annual global revenue of at least 750 million euros ($870 million) and at least 25 million euros ($29 million) within France.
The Trump Administration has decided that the tax is unacceptable, and the US President has lobbed an ultimatum directly at outgoing French President Emmanuel Macron. Either France removes the tech tax, or the United States will levy a 100% tariff on French wines.
Currently, the American market accounts for a fifth of France's global sales, or about $2 billion annually. The proposed tariff comes ahead of the G7 summit, which begins on Monday and runs through Wednesday in Evian, France.
"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 told The New York Post. "All [Macron] has to do is get rid of the sales tax, and he wouldn't have that kind of pressure."
The DST imposes a 3% levy on local revenue generated by large tech companies like Alphabet, Amazon, Apple, Meta, and Microsoft. In 2025, the tax raked in around $700 million, because it is based on revenue, not profit.
When asked for comment, White House spokesman Kush Desai pointed The Post to a presidential memo from February 2025, stating that American businesses would no longer "prop up failed foreign economies through extortive fines and taxes."
The US Treasury Department is currently deciding if it should reopen a formal probe into the proposed tariff. Also not clear is if the President has the authority to invoke that tax at that level, given the Supreme Court ruling that killed the first "reciprocal" tariffs that were based on a trade imbalance, rather than any other factor.
And again, this tariff is applied to the importer, not the exporter. French companies will not be directly hurt by it, other than perhaps by lower sales.