Trump threatens to impose a 100% tariff on French wine: Scrap the digital tax, or forget about entering the U.S. market.

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Trump has once again aimed the trade war at France, using the core interests of the French wine industry as leverage, demanding that Paris abolish the digital services tax targeting American tech giants, or he will impose a 100% tariff on all French wine and champagne.

On Monday, Trump said in an exclusive interview with the New York Post that he has directly warned outgoing French President Macron to cancel the 3% tech tax. The U.S. market accounts for about one-fifth of France’s global wine sales, with annual sales exceeding $2 billion, making this threat a direct blow to the French wine industry.

"I asked him not to tax American companies. If they do, I have no choice but to levy a 100% tariff on all champagne and wine from France," Trump said.

This statement directly broke last week's claim from Macron's office at the Élysée Palace—which had asserted that the two countries had quietly resolved this long-standing dispute. The confrontation is set to come to a head at the G7 summit held in Évian-les-Bains, France, on Monday, casting a heavy shadow of trade friction over the event.

French Digital Tax: Specifically Targeting American Tech Giants

The French digital services tax, commonly known as the "GAFAM tax," was officially implemented in 2019, levying a 3% tax on the local income of tech giants such as Google parent company Alphabet, Amazon, Meta, and Apple generated within France.

Because this tax targets total revenue rather than profit, the impact on American tech companies is especially significant. According to France’s Ministry of Finance, the tax collected about $700 million last year.

In October last year, the French National Assembly passed by 296 votes to 58 a proposal to double the tax rate to 6% and narrow the tax threshold, specifically targeting the largest global tech platforms. However, the proposal was ultimately vetoed by the cabinet. Lawmakers initially even proposed raising the rate to 15%, but later backed down under industry pressure. French former Economy Minister Roland Lescure warned that "disproportionate" taxes would invite "disproportionate" retaliation from the U.S.

Escalating Threat: 100% Tariff Not Raised for the First Time

The 100% tariff threat raised by Trump this time is not new. As early as 2019, during a formal investigation by the U.S. Trade Representative into the French digital tax, this punitive tariff rate was already proposed.

White House spokesperson Kush Desai, when asked about the matter, cited a presidential memorandum signed by Trump in February 2025, which clearly stated that American companies would no longer "prop up failed foreign economies through extortionate fines and taxes." The memorandum also tasked U.S. Trade Representative Jamieson Greer and the Treasury Department to assess whether to restart a formal investigation into the French digital tax.

Macron was previously dubbed by outsiders as the "Trump interpreter" capable of striking deals with Trump, including brokering a last-minute truce at the 2019 Biarritz G7 summit. However, the Trump administration's attitude this time has noticeably hardened.

Allied Fragmentation: Different Countries, Different Stances on Digital Tax

France's tough stance on digital tax has left it somewhat isolated among certain allies. Canada has shelved its own digital tax plans after the U.S. suspended trade talks in 2025; reportedly, Italy is also considering abolishing the relevant tax.

The UK is an exception—under the current trade arrangement framework with the U.S., Britain has retained its own digital services tax.

This G7 summit will continue until Wednesday. The host nation, France, faces obvious pressure. For the French wine industry, the importance of the U.S. market makes it highly vulnerable to becoming a casualty in trade negotiations, and Trump’s ultimatum will subject Macron to even greater diplomatic pressure at the summit on home turf.

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