Cases of French wine in a dimly lit warehouse await shipping.
President Donald Trump has issued a stern warning to France, threatening to impose 100% tariffs on all French wines and champagnes if French President Emmanuel Macron does not repeal his country’s 3% digital services tax. The threat comes just hours before Trump’s departure for the Group of Seven (G7) summit, which Macron is hosting in France.
Trump stated in an interview with The New York Post, “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.” He added, “All [Macron] has to do is get rid of the sales tax, and he wouldn’t have that kind of pressure.”
This move escalates a brewing transatlantic trade dispute. France’s digital services tax, often referred to as the GAFAM tax, was implemented in 2019. It targets large digital companies with significant revenue in France and globally, applying a 3% levy. U.S. officials argue that this tax disproportionately impacts American technology firms.
The latest threat revives tariff levels previously considered by the U.S. Trade Representative in 2019 during an investigation into France’s digital tax. At that time, Trump had floated substantial tariffs on wine and other alcoholic beverages from France and the European Union.
Alcoholic beverages represent a significant export for the European Union to the United States, valued at approximately €9 billion ($10.5 billion) in 2024, according to Eurostat. France, with its specific regional appellations for products like champagne and cognac, is particularly vulnerable as producers have limited options to shift supply chains. Currently, French wine and spirits exports to the U.S. face a 15% tariff.
The U.S. market is a crucial outlet for the French wine industry, accounting for about one-fifth of its global sales, exceeding $2 billion annually. France’s National Assembly had previously considered doubling the digital tax to 6% but later scaled back the increase.
Trump’s renewed tariff threat also comes as other countries reassess their own digital services taxes under U.S. pressure. Canada has shelved its digital tax, and Italy is reportedly considering repealing its levy. The G7 summit, which includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, is set to run through Wednesday.
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