On the eve of the G7 summit in Évian-les-Bains, President Donald Trump issued a stark ultimatum to France: remove the three per cent digital services tax on American technology firms or face a 100 per cent tariff on all French wines and champagne entering the United States. In an interview with the New York Post, Trump said he had conveyed the warning directly to President Emmanuel Macron, insisting that Washington would have “no other choice” if Paris maintained the levy. The tax, in force since 2019, targets the in-country revenues of Silicon Valley giants such as Alphabet, Amazon, Apple and Facebook, and has long been a source of transatlantic friction.

Viewed from Paris, the threat landed as a crude attempt to dictate European tax policy. Macron responded calmly but firmly on French television, stating that “that is not how it works” and promising a “respectful but hard” conversation at the summit. He pointed out that a tariff agreement between the European Union and the United States had been concluded only last summer, and that the digital tax was not a French idiosyncrasy but part of a broader European approach. Officials in Brussels underscored that trade policy is an EU competence, meaning punitive tariffs against one member state could trigger a bloc-wide response, potentially reigniting the trade war that had only recently cooled.

The economic stakes are considerable. The United States is the largest export market for French wines and spirits, absorbing 21 per cent of the sector’s overseas sales last year. European alcohol exports to America were valued at roughly €9 billion in 2024, with protected designations such as champagne and Remy Martin cognac particularly exposed. A 100 per cent duty would effectively price these products out of the American market, devastating producers in regions from Bordeaux to the Marne Valley. The threat thus transforms a long-simmering dispute over digital taxation into an existential challenge for one of France’s most emblematic industries.

Trump’s combative posture sits uneasily alongside his stated ambition to arrive at the G7 as a peacemaker, following a preliminary accord with Iran. The contradiction was not lost on summit watchers: a leader seeking to project diplomatic gravitas simultaneously brandished a trade weapon against the host nation. Analysts in London note that the digital services tax dispute is far from settled at the global level, with OECD negotiations on a multilateral framework still deadlocked. Unless the G7 leaders can find a path towards compromise, the confrontation risks escalating from a bilateral spat into a broader EU-US trade conflict, with tariffs ricocheting across the Atlantic and undermining the very concertation the summit was designed to foster.