The US leader said he could tax one of France's key exports over a new digital tax on internet giants Google and Amazon. "I've always said American wine is better than French wine," said Trump, who doesn't drink alcohol.
Image: picture-alliance/AP Photo/F. Seco
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US President Donald Trump has vowed to retaliate against France's planned digital tax, threatening to increase tariffs on the country's iconic drink.
"We will announce a substantial reciprocal action on Macron's foolishness shortly. I've always said American wine is better than French wine!" Trump tweeted on Friday, referring to French President Emmanuel Macron.
Later in the Oval Office, Trump explained that the US may impose a tax on French wine, but other options are being considered as well.
Trump, a famous teetotaler, also explained his comment about preferring American wine, saying: "I don't drink wine. I just like the way they look."
The US is the largest export market for French wine. In 2018, the US made up nearly a quarter of all French wine exports, amounting to €3.2 billion ($3.6 billion).
Macron's office said the French president discussed the need for "a broad international agreement" on a digital tax in a phone call with Trump on Friday.
The issue will also be a topic of discussion at the upcoming G7 summit, to be held in France in August.
French Economy Minister Bruno Le Maire also indicated that Paris was not planning on backing down from its move to levy taxes on tech giants, despite the threat against France's second-largest export.
"We want to reach an agreement within the G7 and the OECD. In the meantime, France will implement its national decisions," Le Maire said.
EU move toward digital tax
The French Parliament recently passed a law that would impose a tax on digital companies if their French revenue exceeds €25 million ($27 million) and if global sales are over €750 million.
Although the law does not specifically target US companies, the revenue threshold means tech giants like Amazon, Google, Apple and Facebook would be affected.
The move is aimed at stopping multinational companies from avoiding taxes by setting up headquarters in low-tax European Union countries.
Other EU countries, including Spain, Austria and Britain, have also announced plans for similar digital taxes.
Trump's tariffs and who they target
US President Donald Trump has repeatedly boasted that the tariffs he has imposed on trading partners are a financial windfall but, research shows it is Americans who bear the brunt of the impact. DW has an overview.
Image: picture-alliance/newscom/B. Greenblatt
Solar panels and washing machines
The first round of tariffs in 2018 were on all imported washing machines and solar panels — not just those from China. A study by economists from the Federal Reserve Bank of
New York, Columbia University, and Princeton University found that the burden of Trump's tariffs — including taxes on steel, aluminum, solar panels falls entirely on US consumers and businesses who buy imported products.
On Friday May 10, 2019 President Donald Trump imposed sanctions on $200 billion (€178 billion) worth of Chinese goods. The move raised tariffs from 10% to 25% on a range of consumer products, including cell phones, computers and toys. China's Commerce Ministry said it "deeply regrets" the US decision.
Image: Getty Images/AFP/STR
Issues with the EU
In April 2019, the United States said it wanted to put tariffs on $11.2 billion worth of goods from the EU. The list includes helicopters and aircraft from Airbus as well as European exports like famous cheeses such as Stilton, Roquefort and Gouda, wines and oysters, ceramics, knives and pajamas.
Image: Imago/Ralph Peters
EU fights back
The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for US tariffs on European steel and aluminum. Targeted US products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminum.
Image: Getty Images/AFP/M. Ralston
European automakers next?
May 17, 2019 is the deadline for President Trump to decide on imposing tariffs on vehicle imports from the EU. According to diplomats, Germany, whose exports of cars and parts to the United States are more than half the EU total, wants to press ahead with talks to ward off tariffs on automakers Volkswagen, Mercedes and BMW.
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India not exempt
India, the world's biggest buyer of US almonds, on June 21, 2018 raised import duties on the nuts by 20% and increased tariffs on a range of other farm products and US iron and steel, in retaliation for US tariffs on Indian steel. Trump said last month that he would end preferential trade treatment for India, which would result in US tariffs on up to $5.6 billion of imports from India.
Image: Getty Images/AFP/R. Schmidt
North American neighbors in tariff spat
Mexico on June 5, 2018 imposed tariffs of up to 25% on American steel, pork, cheese, apples, potatoes and bourbon, in retaliation for US tariffs on Mexican metals. While to the north, Canada on July 1 imposed tariffs on $12.6 billion worth of U.S. goods, including steel, aluminum, coffee, ketchup and bourbon whiskey in retaliation for US tariffs on Canadian steel and aluminum.
