Trump wine comments enrage French ahead of G7

Donald Trump’s threat to put tariffs on French wine is “completely moronic”, according to France’s agriculture minister.

The stage is now set for a tense encounter between Trump and French President Emmanuel Macron at the G7 summit on August 24.

Trump suggested placing tariffs on French wines and other products in retaliation for a new tax on US tech giants.

French plans to place a 3-per-cent tax on the “Gafas” – Google, Amazon, Facebook and Apple – sparking Trump’s anger and a threat of “substantial reciprocal action”.

The Gafas are often accused of unfairly competing with French businesses by booking profits in low-tax countries, like Ireland, no matter where the revenue originates.

“They shouldn’t have done this,” Trump told the US media. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’”

Trump criticised Macron’s “foolishness”.

Despite being teetotal, Trump said he had always preferred US to French wine.

French agriculture minister Didier Guillaume told BFM TV the suggestion was “stupid” and “absurd”, saying the two issues were incomparable.

“It’s completely moronic. Why? Because [tech firms] are making huge profits, millions or billions of euros on our territory, using our people, so there is no reason for them not to pay their taxes,” the minister said.

“Wine is completely different: it’s an exchange.”

Wine is France’s second-biggest export after aerospace.

“When you look into the details, you realise America is the first export market in value terms, but not in volume,” Eric Morain, a lawyer who specialises in the wine sector.

“That means Americans drink French wines that are already expensive. I don’t think someone who’s able to buy a bottle for US$100 or US$150 will think twice before buying one at US$180 or US$200,” he said.

Germany is the largest export market for French wine in terms of volume sold with 2.18 million hectolitres, ahead of the United States.

In value terms, the US comes first, accounting for 18 per cent of French wine exports with €1.7 billion, up almost a third since 2014.

France’s finance minister, Bruno Le Maire, urged Trump not to bring trade tariffs into the debate on how to tax digital services.

“It’s in our interest to have a fair digital tax,” Le Maire said. “Please do not mix the two issues. The key question now is how we can get consensus on fair taxation of digital activities.”

Le Maire repeated Macron’s pledge that France would lift its national digital tax if there was an agreement on a global tax at the Organisation for Economic Co-operation and Development (OECD).

He said France wanted other G7 nations to agree on the principle of universal taxation of digital activities at this month’s summit in Biarritz.

In July the French senate approved a 3-per-cent tax on revenue from digital services earned in France by companies with more than €25 million in French revenue and €750 million globally. Austria, the UK, Spain and Italy have also announced plans for digital taxes.

Picture credit: NeedPix

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.