Trump’s 100% French Wine Tariff Threat Over Digital Tax

President Trump has reopened his long-running feud with Paris, warning that he will slap a 100 per cent tariff on French wine and champagne unless President Macron abandons France’s digital services tax, the 3 per cent levy that falls most heavily on America’s biggest technology firms.

The threat lands just as Trump prepares to travel to France for the G7 summit in Evian-les-Bains, setting up a tense encounter between two leaders who have spent years alternately courting and clashing with one another. Macron’s response was blunt. Told of the ultimatum, he said simply: “That’s not how it works.”

In an interview with the New York Post, Trump framed the matter as a straightforward act of retaliation. “I asked him not to charge American companies and if they do, I have no choice but to charge a 100 per cent tariff on all champagnes and all wines coming out of France,” he said. “All he has to do is get rid of the sales tax and he wouldn’t have that kind of pressure.”

Speaking to the French broadcaster TF1, Macron argued that any fresh increase on French wine would breach the trade settlement struck between Trump and Ursula von der Leyen, the president of the European Commission. “We have just concluded an agreement between Europe and the US on tariffs. Now we need stability,” he said. “This digital services tax, the Europeans decided it and several countries have implemented it. It’s part of our law. It is not for the US to decide on French and European law.”

He added that he was prepared for “a respectful but firm discussion”, while insisting France would not be bounced into rewriting its own statute book. Tariffs, he said, “are no good for anyone”, least of all between G7 partners, because they fail to fix America’s trade position and push up prices for consumers on both sides of the Atlantic.

For France’s winemakers and distillers, the stakes are anything but abstract. Producers shipped €2.9 billion of wines and spirits to the United States in the 12 months to April, making America comfortably the sector’s largest single market — worth 18 per cent of all French wine and spirit exports, ahead of the United Kingdom on 11 per cent and Germany on 6 per cent. Alcohol remains a meaningful contributor to the national accounts, adding €14.3 billion to France’s trade balance in 2024, according to French Customs.

That exposure helps explain the alarm in the trade. Gabriel Picard, chairman of the French Federation of Wine and Spirits Exporters, called for the preservation of a “balanced and constructive trading relationship between France and the US in the interests of both economies”. His caution is well founded: French wine and spirits exports have already lost their fizz, with sales to the US falling sharply through 2025 as successive rounds of duties bit. A jump to triple-digit tariffs would turn a difficult year into an existential one for many smaller châteaux and négociants that depend on American distributors.

None of this is new. Trump first reached for the wine bottle as a weapon in 2019, during his first term, when France introduced the digital services tax. “It might be on wine, it might be on something else,” he warned at the time, before threatening duties on €2.4 billion of French imports including cheese, champagne and handbags. In January he floated a 200 per cent levy on French wine after Macron declined to join the so-called Board of Peace, the US administration’s vehicle for rebuilding Gaza and brokering an end to conflicts elsewhere.

There is already a 15 per cent tariff on French wine and champagne, in line with the wider trade deal agreed between Washington and Brussels that capped duties on most EU goods. The repeated escalation, from threats of 200 per cent earlier in the year to this latest 100 per cent salvo, is becoming a recognisable pattern, one British exporters have learned to read closely given how often Trump’s wine threats spill into the broader transatlantic trade picture.

The digital services tax that so irritates Washington is narrowly drawn but pointedly aimed. It obliges firms with digital-services sales of at least €750 million worldwide, and at least €25 million in France, to hand over 3 per cent of their French revenue under a levy designed to capture the largest technology platforms. The intended targets are American giants such as Google and Amazon, though the net also catches non-US operators including the Netherlands’ Booking.com and China’s Alibaba.

For Macron, the principle matters as much as the money. Several European governments have adopted similar measures, Britain’s own version has drawn hundreds of millions of pounds from US tech groups since its introduction, and conceding to Washington over French law would set an awkward precedent for the bloc as a whole. With both leaders dug in and the G7 cameras about to roll, the champagne corks in Evian may stay firmly in place.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.