Trump threatens France with 'substantial reciprocal action' over tech tax

President Trump vowed to reciprocate against France after President Emmanuel Macron signed into law a tax that takes aim at U.S. tech giants like Amazon and Google.

Continue Reading Below

“France just put a digital tax on our great American technology companies,” Trump wrote in a tweet on Friday. “If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”

Macron this week signed the digital services tax, a 3 percent tax that targets companies worth at least 750 million euros ($834 million) globally and 25 million euros in France. It will be retroactively applied from early 2019 and could generate up to 400 million euros per year.

The Trump administration denounced the move a day before the French Senate voted on it, suggesting it “unfairly” targeted the U.S. Trade Representative Robert Lighthizer said an investigation would "determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce."

Because France is part of the 28-member European Union, it’s unclear how Trump could specifically target the country without ensnaring the entire bloc.

Separately, however, the president is locked in a trade battle with the EU, threatening to slap tariffs on more than $21 billion worth of exports.