Washington July 26: US President Donald Trump has accused French President Emmanuel Macron of “foolishness” over a digital services tax, and hinted that he would retaliate by taxing French wine.
The digital sales tax was approved by the French senate on Thursday, a week after it was passed by the lower house, the National Assembly.
Trump promised to take “substantial reciprocal action” if it seeks to target American technology firm such as Facebook and Amazon.
Trump voiced his anger in a Tweet on Friday, in response to French plans to tax multinational firms like Google.
French authorities argue that the firms pay little or no corporate tax in countries where they are not based.
The French government argues that multinational firms such as Apple, which are headquartered outside the country, pay little or no tax on their sales in France.
White House spokesman Judd Deere on Friday announced the administration was “looking at all policy tools” available to counter the new tax.
Finance Minister Bruno Le Maire said that they would like to come to an agreement with Washington, but in absence of one “France intends to implement its national decisions.”
“The general taxation of digital activities is a problem that concerns us all,” Le Maire said, adding that France wants to reach consensus on that with all G7 members.