Trump targets French wine to retaliate for digital tax

The United States will announce retaliatory action against France in response to the country’s new tax affecting American technology companies, President Donald Trump said Friday.

He suggested he could target French wine with tariffs — a move experts considered the most likely U.S. response to the French digital services tax.

“I’ve always said American wine is better than French wine!” Trump tweeted.

In the tweet, the president said his administration will unveil “a substantial reciprocal action” following what he called French President Emmanuel Macron’s “foolishness.”

Earlier this month, France passed a 3% tax that will affect firms such as Facebook and Google that draw about $28 million or more in revenue from digital services in France. The Trump administration then started an investigation under Section 301 of the Trade Act of 1974.

If, after the probe, the U.S. determines the tax is discriminatory or unreasonably targets U.S. firms, Trump could respond with tariffs. Trade experts considered Trump’s most likely response a 100% tariff on French wine — one of the country’s signature, symbolic products.

In a statement Friday, White House spokesman Judd Deere criticized France’s tax but did not give any new details on what the U.S. could do to retaliate. He said the administration is “looking closely at all other policy tools” in addition to the already launched investigation as it determines how to respond to France.

“The Trump Administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms,” he said.

In a CNBC interview last month, Trump suggested he could put tariffs on French wine. He said California wine producers have complained to him about France putting higher tariffs on imports than the U.S. does. “And you know what, it’s not fair. We’ll do something about it,” he said.

France exported 3.2 billion euros (or about $3.6 billion) in wine to the U.S. last year, according to the Federation of French Wines and Spirits Exporters. The U.S. was France’s biggest wine export market.

Trump does not drink alcohol, but he is familiar with the wine industry. While in office, Trump has touted the Virginia-based Trump Winery operated by his son, Eric.

Tariffs on France would open up another conflict as Trump tries to navigate thorny trade relationships around the globe. Already in the coming months, the White House looks to push a skeptical Congress to approve Trump’s replacement for the North American Free Trade Agreement and strike a trade deal with China.

16 PHOTOS
President Trump and French President Emmanuel Macron
See Gallery
President Trump and French President Emmanuel Macron
U.S. President Donald Trump (L) shakes hands with French President Emmanuel Macron before a working lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Peter Dejong/Pool
U.S. President Donald Trump greets French President Emmanuel Macron before a lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
U.S. President Donald Trump (L) and France's President Emmanuel Macron shake hands before a working lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump jokes with French President Emmanuel Macron about their handshakes in front of NATO leaders, including German Chancellor Angela Merkel, NATO Secretary General Jens Stoltenberg (2ndR) and Belgium King Philippe (L), at the start of the NATO summit at their new headquarters in Brussels, Belgium, May 25, 2017. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
A combination photo shows U.S. President Donald Trump (L) trying twice to let go of a handshake with France's President Emmanuel Macron (R) as Macron holds tight, before a working lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
U.S. President Donald Trump (L) meets French President Emmanuel Macron before a working lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Peter Dejong/Pool
US President Donald Trump (R) talks with French President Emmanuel Macron as they attend the Summit of the Heads of State and of Government of the G7, the group of most industrialized economies, plus the European Union, on May 26, 2017 in Taormina, Sicily. The leaders of Britain, Canada, France, Germany, Japan, the US and Italy will be joined by representatives of the European Union and the International Monetary Fund (IMF) as well as teams from Ethiopia, Kenya, Niger, Nigeria and Tunisia during the summit from May 26 to 27, 2017. / AFP PHOTO / POOL / STEPHANE DE SAKUTIN (Photo credit should read STEPHANE DE SAKUTIN/AFP/Getty Images)
U.S. President Donald Trump (L) meets French President Emmanuel Macron before a working lunch ahead of a NATO Summit in Brussels, Belgium, May 25, 2017. REUTERS/Peter Dejong/Pool
US President Donald Trump (L) and US First Lady Melania Trump (C) speak with French President Emmanuel Macron (R) as they arrive for a concert of the La Scala Philharmonic Orchestra during the Summit of the Heads of State and of Government of the G7, the group of most industrialized economies, plus the European Union, on May 26, 2017 at the ancient Greek Theater in Taormina, Sicily. The leaders of Britain, Canada, France, Germany, Japan, the US and Italy will be joined by representatives of the European Union and the International Monetary Fund (IMF) as well as teams from Ethiopia, Kenya, Niger, Nigeria and Tunisia during the summit from May 26 to 27, 2017. / AFP PHOTO / POOL / PHILIPPE WOJAZER (Photo credit should read PHILIPPE WOJAZER/AFP/Getty Images)
(L-R) Britain's Prime Minister Theresa May, French President Emmanuel Macron and US President Donald Trump attend the Summit of the Heads of State and of Government of the G7, the group of most industrialized economies, plus the European Union, on May 26, 2017 in Taormina, Sicily. The leaders of Britain, Canada, France, Germany, Japan, the US and Italy will be joined by representatives of the European Union and the International Monetary Fund (IMF) as well as teams from Ethiopia, Kenya, Niger, Nigeria and Tunisia during the summit from May 26 to 27, 2017. / AFP PHOTO / POOL / STEPHANE DE SAKUTIN (Photo credit should read STEPHANE DE SAKUTIN/AFP/Getty Images)
U.S. President Donald Trump meets French President Emmanuel Macron in New York, U.S., September 18, 2017. REUTERS/Kevin Lamarque TPX IMAGES OF THE DAY
U.S. President Donald Trump meets French President Emmanuel Macron in New York, U.S., September 18, 2017. REUTERS/Kevin Lamarque
French President Emmanuel Macron shakes hands with U.S. President Donald Trump as First Lady Melania Trump looks on after the traditional Bastille Day military parade in Paris, France, July 14, 2017. REUTERS/Yves Herman
French President Emmanuel Macron and U.S. President Donald Trump speak with French army general Bruno Le Ray, military governor of Paris, at the end of the traditional Bastille Day military parade on the Champs-Elysees in Paris, France, July 14, 2017. REUTERS/Charles Platiau
French President Emmanuel Macron and U.S. President Donald Trump attend the traditional Bastille Day military parade on the Champs-Elysees in Paris, France, July 14, 2017. REUTERS/Charles Platiau
PARIS, FRANCE - JULY 14: U.S President Donald Trump and his wife Melania Trump, French President Emmanuel Macron during the traditional Bastille day military parade on the Champs-Elysees on July 14, 2017 in Paris France. Bastille Day, the French National day commemorates this year the 100th anniversary of the entry of the United States of America into World War I (Photo by Antoine Gyori/Corbis via Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Read Full Story