U.S. President Donald Trump warned France on Friday that it will shortly face retaliation over its decision to adopt a digital services tax, which the United States believes will disproportionately hit American tech giants like Apple, Facebook, Amazon and Google.
“France just put a digital tax on our great American technology companies,” Trump wrote on Twitter. “If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macrons foolishness shortly. Ive always said American wine is better than French wine!”
French President Emmanuel Macron signed the digital services tax into law this week. It targets companies with at least €750 million ($834 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.
The French action demonstrates “lack of commitment” to the ongoing negotiations on the digital tax issue within the Organization for Economic Cooperation and Development, White House spokesperson Judd Deere said.
“The Trump administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms. The U.S. Trade Representative has already launched a Section 301 investigation into Frances digital services tax, and the administration is looking closely at all other policy tools,” Deere added.
Trumps tweet indicates he has already made up his mind to retaliate, even though the Office of the U.S. Trade Representative has not yet finished an investigation into the issue. The United States imported $2.1 billion worth of wine, beer and other alcoholic products from France last year.
However, the EU is also a top market for California wine. Last year, the industry exported $469 million worth to the 28-nation economic community.