In a tweet on Friday, President Donald Trump threatened to target French wine over French President Emmanuel Macron's decision to tax U.S. tech giants.
What's the background?
Earlier this week, Macron signed a new law that will target tech giants with a 3 percent tax on sales. While these companies operate in countries around the globe, they are often taxed only by the country in which their main base of operations is located. For tech companies like Apple, Google, Facebook, and Microsoft, this is the United States.
France's new law would allow it to gather taxes from the activities undertaken by these companies in France. The tax only singles out companies that have roughly $28 million in digital sales in France and total global revenue of at least $834 million.
Trump believes that this unfairly targets American companies.
What did Trump say?
In his tweet, Trump said "France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron's foolishness shortly. I've always said American wine is better than French wine!"
France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their… https://t.co/WIpeHmUp1A— Donald J. Trump (@Donald J. Trump)1564158762.0
Just an hour prior to this tweet, Trump had threatened in another tweet to slap penalties of his own on a U.S.-based tech giant, Apple, if it didn't make parts for its phones in the United States. Apple notoriously uses low-wage labor in China to keep the costs of its phones down.
In a statement to Politico, White House spokesman Judd Deere said, "The Trump administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms. The U.S. Trade Representative has already launched a Section 301 investigation into France's digital services tax, and the administration is looking closely at all other policy tools."