A threat by Donald Trump to tax French wines in retaliation to a proposed levy aimed at big US technology companies is “completely moronic”, France’s agriculture minister has said.
French plans to place a 3% tax on the “GAFAs” – Google, Amazon, Facebook and Apple – drew an angry response from the US president, who warned last week that his administration would announce “substantial reciprocal action”.
“They shouldn’t have done this,” Trump told reporters. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’” He added that, despite being teetotal, he has always preferred American wine to French wine.
On Tuesday the French agriculture minister Didier Guillaume hit back, telling BFM TV: “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.
“American wine is not better than French wine,” he added.
On Saturday, the French finance minister, Bruno Le Maire, urged the US not to bring trade tariffs into the debate on how to fairly raise levies on digital services.
“It’s in our interest to have a fair digital tax,” Le Maire told reporters. “Please do not mix the two issues. The key question now is how we can we get consensus on fair taxation of digital activities.”
Le Maire reiterated French president Emmanuel Macron’s assurance that France would lift its national digital tax if there was a deal on a universal tax at the level of the Organisation for Economic Co-operation and Development (OECD).
He added that France wanted leaders of the G7 group of nations to agree on the principle of universal taxation of digital activities at next month’s summit in the coastal resort of Biarritz.
Two weeks ago the French senate approved a 3% levy that will apply to revenue from digital services earned in France by companies with more than €25m (£23m) in French revenue and €750m worldwide.
Other EU, including Austria, Britain, Spain and Italy, have also announced plans for their own digital taxes.