President Donald Trump has threatened to impose 100 percent tariffs on French wines and champagne unless France repeals its digital services tax on American technology companies. The warning, delivered ahead of this week’s G7 summit in Évian-les-Bains, France, revisits a trade dispute that has persisted between the two nations since the tax’s introduction in 2019.

Trump communicated the ultimatum directly to French President Emmanuel Macron, criticizing the 3 percent levy, commonly referred to as the GAFAM tax, which targets revenue generated in France by large digital firms such as Alphabet, Amazon, Meta, and Apple. Trump emphasized that unless the tax is abolished, the United States would have "no choice but to charge a 100% tariff on all Champagnes and all wines coming out of France." The U.S. market accounts for nearly 20 percent of French wine exports, valued at over $2 billion annually, underscoring the potential economic impact of such measures.

Macron responded firmly, asserting that tariffs “don’t do anyone any good,” particularly among G7 nations. Speaking to French broadcaster TF1, he rejected the tariff threat, stating, “No, because that is not how it works,” and reaffirmed that the digital services tax is part of French and European law, which the U.S. has no authority to override. Macron also cited a recent trade agreement between the U.S. and the European Union aimed at tariff stability, warning that increasing duties would contravene that understanding.

The tension exposes unresolved differences despite prior claims by the Élysée Palace that the taxation dispute had been settled. A senior French official recently declared the matter “no longer up for debate,” a statement immediately challenged by a U.S. official. White House spokesman Kush Desai referenced a February 2025 presidential memo declaring that American businesses should no longer “prop up failed foreign economies through extortive fines and taxes,” suggesting a continued hardline stance from the Trump administration on global trade disputes.

French exporters expressed concerns over the potential tariffs. Gabriel Picard, chairman of the French Federation of Wine and Spirits Exporters, urged the maintenance of a balanced trade relationship, emphasizing mutual benefit for both economies. In the past, Trump has threatened tariffs on French imports multiple times related to the digital tax, including a 200 percent tariff proposal in January linked to broader geopolitical disagreements.

Currently, French wines and spirits face a 15 percent tariff under the U.S.-EU trade agreement signed in 2025. The digital services tax applies to companies with significant global and French digital revenues, targeting predominantly American tech firms but also some European and Asian companies.

As the G7 summit convenes, the dispute highlights ongoing challenges in balancing national tax policies with international trade commitments among the world’s largest economies. Both leaders are expected to address the matter in forthcoming discussions, with the outcome carrying significant implications for transatlantic trade relations.