Renowned wine entrepreneur Jean-Charles Boisset joins ‘Varney & Co.’ discussing the similarities and differences between American and French wine and the Fox News Wine Shop Sweepstakes.
France must reduce tariffs on American technology or face 100% tariffs on its wine, President Donald Trump warned hours before heading to the Group of Seven Summit.
The US “will have no choice” but to implement tariffs if French President Emmanuel Macron does not end its 3% tax on large digital services companies.
“I asked him not to tax American companies, and if they do, I have no choice but to impose a 100% tariff on all champagne and all wine from France,” Trump told the New York Post in an interview. “Everything [Macron] all he has to do is get the sales tax out, and he wouldn’t have that kind of pressure.”
The warning raises the prospect of renewed transatlantic trade tensions as Trump heads to Évian-les-Bains, France, for the G7 summit Macron will host. The round comes as America’s allies remain wary of Washington’s increasingly aggressive approach to trade disputes.
TRUMP’S INTERNATIONAL TIF PLAN IS PAYING FOR US GOODS
French President Emmanuel Macron and President Donald Trump have had a checkered past since the first Trump administration. (Al Drago/Bloomberg via Getty Images/Getty Images)
The White House did not immediately respond to FOX Business’ request for comment.
The French digital services tax, commonly known as the GAFAM tax (Google, Apple, Facebook, Amazon, and Microsoft), has been in effect since 2019. It applies a 3% tax on income earned in France by large digital companies with more than $29 million in French income and approximately $870 million in global income. The move has long irked US officials because it unfairly affects American technology companies.
Trump’s comments appeared to contradict claims by Macron’s office last week that the dispute was no longer being discussed among the G7 countries. The New York Post reported that a US official dismissed that account as incorrect.
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WINE BUYERS ARE LOOKING FOR HIGH FEES
The latest threat revives tax rates that were first floated during the US Trade Representative’s investigation into France’s digital tax in 2019. Trump previously threatened higher tariffs on wine and other spirits from France and the European Union, including threats of 200% duties as trade tensions escalated.
Alcohol is one of the top exports from the European Union to the United States, worth about 9 billion euros ($10.5 billion) by 2024, according to Eurostat data. France is particularly exposed because products such as champagne and cognac must be produced in certain regions, leaving producers with limited ability to change supply chains.
French wine and spirits exports to the US currently face a 15% tariff, a rate French officials have been pushing to reduce to zero since Trump and European Commission President Ursula von der Leyen agreed on a US-EU trade deal in Scotland last summer.
President Donald Trump is threatening a 100% tariff on wine and champagne from France. (Justin Sullivan/Getty Images)
TRUMP’S G7 MEETINGS COME AMID CHINA BRAWL
The New York Post reported that the US market accounts for about one-fifth of the French wine industry’s global sales, worth more than two billion dollars a year.
The French National Assembly voted in October to double the digital tax to 6% and reduce the concentration limit on the world’s largest companies, although ministers later opposed the move. Lawmakers first considered a much larger increase before scaling it back amid pressure from the industry.
Trump’s renewed tariff threat also comes as some of America’s trading partners are reassessing tariffs on digital services under pressure from Washington. Canada scrapped its digital tax by 2025 after the US cut off trade talks, while Italy has reportedly scaled back its tax repeal. Britain has retained its digital services tax under its current trade arrangements with the United States.
Liz Claman reports on the Trump administration’s new tariff threats, imposing 10-12.5% tariffs on 60 trading partners, citing forced labor. Medtronic expects a $250 million tax hit by 2027, impacting US companies.
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The G7 summit continues until Wednesday in Évian-les-Bains. The group includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
Reuters contributed to this report.
