French wine at risk: Trump threatens 100% tariff over digital tax

US President Donald Trump threatened to slap a 100 percent tariff on French wine and champagne unless Paris removes a digital services tax on tech firms, the New York Post reported on Monday.

France imposed in 2019 a three percent levy on the revenues earned by technology firms – including American giants such as Facebook, Amazon, Apple and Google parent Alphabet – within the country's borders.

French President Emmanuel Macron is due to host Trump on Monday before the G7 summit gets underway at the spa resort of Evian on Lake Geneva.

Trump said he asked Macron "not to charge American companies", according to the New York Post.

"If they do, I have no choice but to charge a 100 percent tariff on all champagnes and all wines coming out of France," he was quoted as saying.

"All (Macron) has to do is get rid of the sales tax, and he wouldn't have that kind of pressure."

Gabriel Picard, president of the French Federation of Wine and Spirits Exporters (FEVS), called for preserving a "balanced and constructive trade relationship between France and the United States in the interest of both economies."

The dispute "concerns issues that fall outside our scope of action, even though our companies could directly suffer the consequences... This new threat is bad news for our highly export-orientated sector," Picard told AFP.

The United States is the biggest importing country for French wines and spirits, accounting for 21 percent of the overall export market last year, according to the FEVS.

French and European wines exported to the United States already face a 15 percent tariff – up from an earlier 10 percent.

FEVS said the export of French wines and spirits to the United States slumped by 21 percent last year.

In January, Trump threatened 200-percent tariffs on French wine over France's intention to decline an invitation to join his "Board of Peace" aimed at resolving international conflicts.

Canada decided to scrap its digital services tax last year in order to salvage trade talks with the United States, following pressure from Trump.

Proponents for special taxes on big tech firms argue that the goal is to force them to pay taxes where they carry out business, as well as to counter the tax optimisation strategies.

During his first term Trump also threatened to slap tariffs on US imports of champagne and French cheese.

(FRANCE 24 with AFP)