Donald Trump has renewed threats to impose a 100 percent tariff on French wines and champagne over France's three percent digital tax on US tech companies. Speaking ahead of the G7 summit in France, Trump said he asked President Emmanuel Macron to drop the tax targeting Google, Apple, Facebook, Amazon and Microsoft, warning of retaliatory duties if France doesn't comply.

France's digital tax, known as the GAFAM levy, generates roughly $700 million annually by taxing gross revenue from major tech firms. The tax emerged from a 2019 agreement with Trump's first administration, though France's lower house recently voted to double it to six percent before ministers blocked the move. French wine exports to the US represent at least $2 billion in annual sales, making this a significant economic weapon.

Trump's aggressive stance reflects growing pressure from big tech to eliminate digital taxation globally. Canada already repealed its digital tax in 2025 under Trump pressure, while the UK maintains its two percent digital services tax despite similar threats. The French government considers eliminating the tax a political gamble given domestic concerns about US tech dependence.

This tariff threat likely serves as leverage rather than concrete policy, following Trump's pattern of using trade pressure to extract concessions. However, it sets up direct confrontation between US and French leadership at the G7, with potential court challenges if implemented. The wine industry becomes collateral damage in an escalating tech tax war.