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US President Trump threatens wine tariffs in retaliation over French tech tax

Nicholas Kamm, AFP | US President Donald Trump at the White House on July 25, 2019

“France just put a digital tax on our great American technology companies,” Trump tweeted about the law, which targets US giants like GoogleAppleFacebook and Amazon.

“We will announce a substantial reciprocal action on Macron’s foolishness shortly,” he said.

Later, he confirmed earlier hints that wine may be the target.

“Might be on wine or something else,” he told reporters.

Trump and Macron spoke on the phone Friday, discussing the digital services tax among other issues, the White House said. It did not say whether potential tariffs on French wine were part of the conversation.

Trump, a proud teetotaler, said he’d “always liked American wines better than French wines even though I don’t drink.”

Explaining how he comes to that preference, he noted: “I just like the way they look.”

“Universal taxation of digital activities is a challenge for us all. We want to reach an agreement within the G7 and the OECD. In the meantime, France will implement its national decisions,” Le Maire said.

Sour grapes

Trump has generally got along well with Macron, avoiding some of the more stormy episodes marring traditionally stable relations with other close US allies in Europe and Asia.

But his drive to correct what he sees as unfair trade practices by allies and rivals alike has stirred unprecedented discord.

And this is not the first time that he has mused about taking aim at France’s renowned wine industry.

In June, he told CNBC television that domestic wine makers had complained to him about the difficulties of entering the European market.

“You know what? It’s not fair. We’ll do something about it,” he said.

The current row, however, is linked to a law passed by the French parliament this month on taxing digital companies for income even if their headquarters are elsewhere. This would aim directly at US-based global giants like Amazon.

According to France’s Federation for Wine and Spirit Exporters, a bottle of American white wine with an alcohol volume of 13 percent will be subjected to an 11-cent tax, while an equivalent bottle of European wine would pay about half that to enter the US.

The EU is the biggest importer of US wines. However, American wine exports are dwarfed in volume by the far bigger output from France, Italy and Spain.

Sources: AFP

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