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Trump trade truce puts US tariffs on French wine on hold

Published:  22 January, 2020

The USA’s threat of slapping 100% tariffs on US$2.4 billion worth of French imports including wine and Champagne seems to have been put on hold after the countries’ leaders announced a ceasefire on Twitter.

Things have been tense between the two nations throughout 2019, as US president Donald Trump threatened to levy the tariffs in retaliation for a new technology tax which his administration said unfairly targets American companies in France.

French president Emmanuel Macron tweeted he had a “great discussion” with Trump, adding: “We will work together on a good agreement to avoid tariff escalation.”

Yesterday, (January 21) French Finance Minister Bruno Le Maire also confirmed that US and French officials have agreed to avoid rising trade tensions over France’s digital services tax.

However, the truce is only temporary, with no signs that the two countries are closer to resolving their differences.

The news has elicited comment from the trade here in the UK.

Tom Gearing, CEO and co-founder of fine wine investment firm, Cult Wines, said: “[The truce] will be welcomed by the global wine market and in particular producers across France, which employs thousands of people.

“The US consumer, collector and investor market for French wines is significant, with $700m imported from France in 2018. As wine investment specialists and with our USA client base growing significantly, we will of course be monitoring the situation closely. We sincerely hope that a long term resolution is found that does not impact the global wine market.”

Other countries around the world, including the UK, have also looked at introducing a so-called ‘GAFA tax’, which seeks to redress the contributions of the big tech companies like Google, Apple, Facebook and Amazon.

With France’s tax now on hold likely end of the year however, it remains to be seen if the tax itself is repealed.

If not, we could see the dispute reignite if France refuses to change its new law.

The US tariffs were first tabled mid-way through last year in retaliation to France’s new digital services tax.

As well as impacting consumer choice, the tariffs have sparked concern for jobs and investment on both sides of the Atlantic.