Trump warns France of reciprocal action on digital tax

By Michael Hernandez

WASHINGTON (AA) - The U.S. will take reciprocal action against France for its decision to impose taxes on digital services that will affect major American technology giants, President Donald Trump warned Friday.

"France just put a digital tax on our great American technology companies," Trump wrote on Twitter. "If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly."

Trump appeared to hint that the punitive actions he is considering could be imposed on French wine, saying "I’ve always said American wine is better than French wine!"

French President Emmanuel Macron signed the tech giant tax into law Thursday. It applies a 3% tax on tech companies that have total annual revenues of at least 750 million euros with 25 million euros coming from their French revenues.

It is set to hit several major American firms, including Amazon, Apple, Facebook and Google.

The Office of the United States Trade Representative already initiated an investigation at Trump's behest into the law as it was winding its way through the French legislature.

At issue is concern that the law unfairly targets American technology companies.

"France’s unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy. It also demonstrates France’s lack of commitment to the ongoing OECD negotiations," White House spokesman Judd Deere said in a statement.

"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," added Deere.