WASHINGTON/PARIS – U.S. President Donald Trump threatened to tax French wines on Friday in retaliation for France’s recent proposal to levy a tax aimed at big U.S. technology companies. Trump had told French President Emmanuel Macron last week that he was concerned about the proposed digital services tax. “If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly,” Trump tweeted on Friday.
“I’ve always said American wine is better than French wine!” Later in the Oval Office, Trump told reporters the tax decision was wrong and he threatened the key French export. “They shouldn’t have done this,” Trump said. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’” He said a few minutes later that the U.S. response would be announced soon, saying that it “might be on wine, it might be on something else.”
Trump and Macron spoke by telephone on Friday and discussed the tax and next month’s summit of the Group of 7 rich nations in France, the White House said. Macron’s office said the French leader “underlined that the G7 summit would be an important opportunity to move towards a universal taxation of digital activities, which is in our common interest, and which we need to keep working on in order to obtain a broad international agreement.” The United States is by far the largest single export market for French wine and spirits, which is France’s second-biggest export after aerospace.
The United States in 2018 accounted for nearly a quarter of all French wine exports, or 3.2 billion euros’ ($3.6 billion) worth. French Economy Minister Bruno Le Maire said in a statement after Trump’s tweet that “the universal taxation of digital activities is a challenge that concerns all of us. We want to reach a deal on this within the framework of the G7 and the OECD.
In the meantime, France will move ahead with national decisions.” White House spokesman Judd Deere said the United States “is extremely disappointed by France’s decision to adopt a digital services tax at the expense of U.S. companies and workers. France’s unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy.” He added, “The administration is looking closely at all other policy tools.” (Agencies)
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