French wine might be safe from tariffs after France, U.S. strike compromise on digital tax

Cremant de Bordeaux.
(Image credit: NICOLAS TUCAT/AFP/Getty Images)

Your favorite vintage of French wine likely won't get much more expensive in the near future.

Officials from France and the United States reportedly reached a compromise on Monday following the Group of Seven summit in Biarritz, France, on a new French tax passed last month on digital services provided by large internet companies, like Google and Amazon.

The new agreement stipulates that France would repay companies the difference between its digital tax and whatever taxes come from the agreed-upon Organization for Economic Cooperation and Development's planned mechanism. The threshold for the French tax to be applicable for a company is annual revenues of more than $830 million — including $27 million generated in France — from "digital activities," like collection of user data and selling targeted advertising.

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French President Emmanuel Macron praised the compromise, while maintaining that France will nix its national tax if and when his preferred method of an international system for digital taxation is implemented. German Chancellor Angela Merkel said OECD nations want a solution on that by next year.

President Trump had previously threatened to tax French wine if Paris moved forward with its approved three percent tax on digital services.

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Tim O'Donnell

Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.