In order to leave a impressive 'diplomatic record' at the end of his term, French President Emmanuel Macron, who is the host of this year's G7 Summit, hopes that U.S. President Donald Trump will 'show up'. Not only has he made great efforts to cater to Trump's interests on the agenda, but he has also strongly invited him to attend a grand dinner at the Palace of Versailles. However, before even setting off for France, Trump 'slapped Macron in the face'...
On June 14 local time, the American right-wing tabloid The New York Post published an exclusive interview with Trump. The US president warned that France is at risk of facing a new round of trade wars with the United States. He made it clear that unless Paris removes the digital service tax on American tech giants, the United States will have “no choice” but to impose a 100% tariff on French wine.
Trump stated that he has directly given this stern warning to Macron, who will step down next year. He demanded that France cancel the 3% technology tax, otherwise France will face devastating tariffs in the US market. The US market accounts for one-fifth of the global sales of French wine, with annual exports exceeding $2 billion.
"I demanded he stop taxing American companies, and if they did so, I would have no choice but to impose a 100% tariff on all champagne and wine originating from France," Trump told The New York Post. "If Macron removes this sales tax, he will be spared this pressure."
On the 15th, Macron responded to Trump's tariff threats by saying that France would not succumb to US threats and cancel the digital tax on American tech giants. The digital tax is part of the European legal system, and some countries have already implemented it. The US has no right to make laws for Europeans or French people.
October 13, 2025 - Egypt, Shamal Shaykh, US President Trump shakes hands with French President Macron. IC Photo
According to reports, Trump’s final directive foreshadows potential intense confrontations at the G7 summit scheduled for June 15 in Le Bourget, France, local time.
Trump's remarks further contradicted the statement made by the Élysée Palace last week, which claimed that France and the United States had quietly resolved a long-standing dispute regarding taxation of companies in Silicon Valley.
A senior source close to French President Macron told reporters last week that the issue was no longer a matter of dispute among G7 countries. However, U.S. officials immediately refuted this claim, stating it was “inaccurate”.
The digital service tax in France, commonly known as the “GAFAM tax,” has been in effect since 2019. This tax is imposed on local revenues generated by companies such as Google's parent company Alphabet, Amazon, Meta, and Apple, at a rate of 3%.
Since this policy targets total revenue rather than profits, it has had the most significant impact on American tech giants. According to data from the French Ministry of Finance, this tax alone generated approximately $700 million in revenue last year.
In October last year, the situation became even more serious. At that time, there were significant differences of opinion within the French National Assembly (equivalent to the U.S. House of Representatives). Ultimately, a bill was passed with 296 votes in favor and 58 against. The bill proposed doubling the tax rate to 6% and lowering the tax threshold, targeting the world’s largest corporate giants.
However, this measure was ultimately rejected by the government ministers.
Members initially proposed a punitive tax rate of up to 15%, but had to reduce the figure under industry pressure. At that time, Roland Lescure, French Minister of Economy and Finance, warned that imposing “unproportional” taxes would lead to “unproportional” retaliation from the United States.
Now, such retaliatory measures are beginning to emerge. Trump's latest threat refers back to the punitive 100% tariffs—a tariff rate that was originally proposed by the U.S. Trade Representative during an investigation into French taxes in 2019.
According to The New York Post, although Macron was once known as “Trump’s whisperer” for being able to reach an agreement with Trump, including facilitating a temporary truce between the two sides at the last moment of the 2019 G7 Summit in Biarritz, the Trump administration is now taking a more tough stance globally.
When asked about this matter, White House spokesperson Kush Desai mentioned a presidential memorandum from February 2025, which stated that American companies would no longer be “supporting failed foreign economies through extortionate fines and taxes”.
This memorandum instructs U.S. Trade Representative Robert Green and the U.S. Treasury Department to decide whether to resume an official investigation into this tax issue in France. Currently, neither of these two departments has responded to requests for comment.
The report also noted that France's efforts to increase the digital service tax have also drawn it further away from some important allies who have made concessions in response to US pressure. Canada has put off implementing its own digital service tax after the US terminated trade negotiations in 2025. It is reported that Italy is also considering canceling related tax measures.
However, under the current trade arrangements with the United States, the UK retains its digital service tax.
