Trump’s Wine War Is Giving Macron a Headache

Thursday, 15 August, 2019
Bloomberg
The U.S. president is threatening to impose tariffs on French wine in response to Macron’s digital tax. It’s not going down smoothly.

U.S. President Donald Trump has taken aim at France’s most famous export: wine. His threats to slap higher import tariffs on grands crus, champagnes and the like in retaliation to a new French tax on big tech firms have left Didier Guillaume, France’s Agriculture Minister, apoplectic. It’s an “absurd” and “stupid” response, he fumed, to a legitimate attempt by a sovereign state to get the likes of Amazon.com Inc. and Apple Inc. pay their fair share in France.  

Plenty of people will raise a glass to that analysis. Governments across the world have balked at the aggressively "efficient" corporate structures of tech multinationals, which pay next to nothing in tax thanks to legal loopholes that aren’t easy to close. Even Trump excoriated Amazon in a tweet last year, saying the company paid “little or no taxes” and put unfair pressure on retailers. Attacking France for doing something about it is pretty hypocritical; hiking wine tariffs is downright hostile.

But while France’s position is understandable, it won’t make resolving the dispute any easier. President Emmanuel Macron’s administration has clearly struck a nerve with a 3% digital tax that breaks fiscal taboos. It’s based on sales rather than profits and has been structured to spare a lot of French firms. Trump and Amazon CEO Jeff Bezos, despite their past disagreements, now seem determined to make France pay. Amazon is passing the tax on to its French vendors; Trump is threatening to pass it on to French vineyards. So much for global consensus.

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Presidents Macron and Trump
Presidents Macron and Trump

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