Trump threatens 100% tariff on French wine over digital tax as G7 meets

President Donald Trump has threatened to impose a 100% tariff on all French wine and champagne unless Paris abandons the tax it levies on large American technology companies, reopening a transatlantic trade dispute hours before a Group of Seven summit hosted by French President Emmanuel Macron.

Speaking to the New York Post on Monday, 15 June, as he prepared to travel to the lakeside town of Évian-les-Bains for the G7 gathering, Trump tied the threatened duties directly to France's digital services tax — the 3% levy on tech revenue that Washington has long branded discriminatory against US firms.

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.

"All Macron has to do is get rid of the sales tax, and he wouldn't have that kind of pressure," Trump added. The threat would more than double the burden on French exporters, who already pay a 15% US tariff on wine and spirits under the trade truce the European Union struck with Washington last year.

What the tax does, and why Washington objects

France introduced its digital services tax in 2019, and it has been a transatlantic irritant ever since. The measure combines:

• a 3% rate on French revenue from targeted digital services;
• a scope limited to firms with more than €750 million in global digital sales and €25 million in France;
• a design that falls largely on US groups such as Google, Apple, Facebook and Amazon — the cluster French officials nickname the "GAFA" tax.

The standoff predates Trump's second term. In 2019 the Office of the US Trade Representative opened a Section 301 investigation and proposed duties of up to 100% on roughly $2.4 billion of French goods, from champagne and cheese to handbags. Those duties were later set at 25%, narrowed and then suspended to make room for global tax negotiations at the OECD. The latest warning revives that maximalist figure — and lands as French lawmakers, who voted in late 2025 to sharply raise the levy, debate its future. The minority government has signalled it wants to strike the increase down.

Macron digs in

Macron refused to bend. Speaking to French broadcaster TF1, he cast the tax as a matter of sovereign European law rather than a bargaining chip, and warned that a new duty on wine would breach the settlement his EU partners reached with Washington in 2025.

"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."

French winemakers, already bruised, urged restraint rather than escalation. Gabriel Picard, who heads the federation of French wine and spirits exporters, called for a "balanced and constructive trading relationship between France and the US". His members have reason to worry: exports to the United States fell about 21% in value to roughly €3 billion in 2025, and the US remains France's single biggest wine-and-spirits market, taking nearly one-fifth of everything the sector ships abroad. Total French exports slid about 8% to €14.3 billion, a multi-year low, dragged down in part by tariff threats — including a 200% figure Trump floated as recently as January.

An EU-wide exposure

For all the focus on Bordeaux and Champagne, France cannot answer Trump on its own. Under the EU's common commercial policy, trade is an exclusive competence of the European Commission, which negotiates and retaliates on behalf of all 27 member states. That makes the wine threat a test of the bloc's collective trade defence as much as of French diplomacy.

The Commission's president, Ursula von der Leyen, agreed a ceiling of 15% on nearly all EU goods with Trump at Turnberry, Scotland, in July 2025 — the deal Macron says a 100% wine duty would violate. Brussels also retains heavier tools, including the Anti-Coercion Instrument, an untested "trade bazooka" that would let the EU restrict US trade, services and public-procurement access if it judged that Washington was using tariffs to bend a member state's domestic law. Deploying it against the United States would be unprecedented and politically fraught.

Why it reaches Luxembourg

The quarrel may centre on French vineyards, but its stakes spread across the single market — Luxembourg included. As an EU member, the Grand Duchy has no national tariff lever of its own; it depends entirely on the Commission's response, and its voice runs through the Council in Brussels rather than any bilateral channel to Washington.

That matters more for Luxembourg than for most. The country is among the most trade-open economies in the bloc, with cross-border flows that dwarf the size of its domestic market, so a renewed US-EU tariff spiral threatens its exporters well beyond the drinks aisle. Luxembourg also has its own small stake in the product at the centre of the row: the terraced vineyards of its Moselle valley produce still wines and crémant, a niche but symbolic sector that, like France's, sits on the wrong side of any escalation.

Whether Trump follows through is unclear. His pattern has been to threaten steep duties, then trade them away in negotiation, and France's wine lobby is betting on de-escalation. But with the tax dispute unresolved, the EU's truce only a year old and a Commission anxious to guard it, the champagne bottle has once again become a bargaining chip in a fight over how Europe taxes American technology.