PARIS—The wine wars rage on.
Last week, French President Emmanuel Macron officially signed into law a bill that allows the French government to levy special taxes on certain revenues that large American technology companies such as Google, Amazon, Facebook and Apple earn in France.
That incensed President Donald Trump, who immediately threatened a trade war of sorts, by imposing retaliatory tariffs on French wines.
“They shouldn’t have done this,” Trump said Friday, speaking to reporters. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’”
In France, where wine remains one of the most sacred national products, these were seen as fighting words. But Trump—a self-proclaimed teetotaler—escalated the situation even further.
“I’ve always liked American wines better than French wines—even though I don’t drink wine,” he said. “I just like the way they look, okay?”
This particular value judgment did not sit well in France.
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“It’s absurd, in terms of having a political and economic debate, to say that ‘if you tax the GAFAs, I’ll tax wine.’ It’s completely moronic,” French Agriculture Minister Didier Guillaume said Tuesday morning, speaking on France’s BFM Television.
But he also added a crucial distinction. “American wine is not better than French wine,” Guillaume said.
GAFA is the acronym by which the new tax law is known in France—Google, Amazon, Facebook, Apple.
It would impose a 3 percent tax on certain revenues these firms earn in France on the grounds that they were paying insufficient income taxes. French Finance Minister Bruno Le Maire has attempted to calm the waters and avert a potential trade standoff.
“It’s in our interest to have a fair digital tax,” Le Maire said.
“Please do not mix the two issues. The key question now is how we can we get consensus on fair taxation of digital activities.”