Trump Warns France of Trade War Risk Over 3% Digital Services Tax

U.S. President Donald Trump warned that France risked a new trade war with the United States if it does not drop its 3% digital services tax. According to Jin10, the New York Post reported that Trump said he had directly warned French President Emmanuel Macron to abandon the tax or face what he described as devastating tariffs in the U.S. market. Trump said the U.S. market accounts for one-fifth of global sales for France’s wine industry, with annual sales exceeding $2 billion. He said that if France taxes U.S. companies, he would have no choice but to impose a 100% tariff on all champagne and wine from France, adding that the pressure would disappear if Macron cancels the sales tax. France’s digital services tax, often referred to as the “GAFAM tax,” has been formally in effect since 2019. The tax imposes a broad 3% levy on local revenue generated in France by companies including Alphabet, Amazon, Meta, and Apple. The report said the policy targets total revenue rather than profits, which it said hits major U.S. technology companies the hardest.