Trump vows ‘substantial reciprocal action’ against France over tax targeting tech giants

President Trump vowed Friday to take “substantial reciprocal action” against France after President Emmanuel Macron signed into law a tax targeting technology giants like Amazon and Google.

“France just put a digital tax on our great American technology companies,” Trump tweeted. “If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”

France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!

— Donald J. Trump (@realDonaldTrump) July 26, 2019

In the Oval Office later Friday, Trump said he would announce the retaliation “fairly soon,” and repeated that he might focus on French wines.

“I’ve always liked American wines better than French wines,” Trump said. “Even though I don’t drink wine.”{mosads}

Despite describing Macron’s “foolishness” in the tweet, Trump told reporters that the two have “a good relationship.”

Macron this week signed the digital services tax, which imposes a 3 percent tax on the annual revenues of technology companies that make at least 750 million euros annually and provide services to users in the country.

The tax would affect several companies, including U.S.-based tech giants like Apple, Google, Facebook and Amazon.

“The United States is extremely disappointed by France’s decision to adopt a digital services tax at the expense of U.S. companies and workers,” White House deputy press secretary 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,” he added, noting the administration is looking at its policy options to respond.

France is a member of the European Union, so it’s unclear how Trump might specifically target the country without ensnaring the entire political bloc in a fresh trade dispute.

The Trump administration launched an investigation earlier this month into the French government’s proposal, raising concerns that the policy could disproportionately affect American companies, but Trump’s pledge to take action raises the stakes in the fight between the allies.

Europe has taken several tough actions on American technology companies. The European Commission is pursuing antitrust probe into Amazon, and the EU approved earlier this year a new set of copyright rules opposed by platforms like Google and Facebook.

The digital tax is the latest instance of a break between Trump and Macron, who appeared to have a strong personal connection when the French president was welcomed for a state visit last year. But the two men have not seen eye-to-eye on the Iran nuclear deal, and Trump has periodically called out the French president on Twitter.

Trump has often resorted to tariffs to handle foreign policy matters during his presidency, including in talks with allies.

The Trump administration is engaged in a tit-for-tat trade war with China amid efforts to negotiate a trade deal. Trump has also threatened to levy tariffs on Mexican imports over the handling of immigrants at the border and has held on to the prospect of increasing tariffs over Japan and Canada.

Updated at 5:32 p.m.