Trump Goes After French Wine In Response to France's Digital Service Tax

Trump's trade war is about to shift focus to the EU. Consequences could be brutal and I am not talking about wine.

Trump Responds

Please consider Trump Targets French Wine While Threatening ‘Substantial’ Retaliation Against France for Digital Tax.

Earlier this month, France passed a 3% tax that will affect firms such as Facebook and Google that draw about $28 million or more in revenue from digital services in France. The Trump administration then started an investigation under Section 301 of the Trade Act of 1974.

If, after the probe, the U.S. determines the tax is discriminatory or unreasonably targets U.S. firms, Trump could respond with tariffs. Trade experts considered Trump’s most likely response a 100% tariff on French wine — one of the country’s signature, symbolic products.

French Wine Irrelevant

A tariff on French wine is irrelevant. People who drink it are not all that price-conscious.

Rather, this will accelerate Trump's desire to punish the EU.

He will use this as part of his excuse to go after German cars and EU agriculture in general.

The consequences will be significant if this accelerates especially given the precarious state of manufacturing in General and Germany in particular.

  1. US, Germany, Japan in Manufacturing Recessions: Full-Blown Recessions Coming Up
  2. Manufacturing Recessions vs Real Recessions: How Much Lead Time Do You Expect?

Question of the Day

Meanwhile, I exit with the question of the day.

Is that a purposely stupid statement by Trump or just plain stupid?

Mike "Mish" Shedlock

Comments (17)
No. 1-13
Jimymac
Jimymac

I like corvettes better than dodges, I don't own a corvette, but I like the way it looks. Can you and Caroline please find some critical thinking skills.

Sechel
Sechel

@Mish You're wrong and out of touch Mish if you think Americans are not price conscious when it comes to the consumption of Burgundy. Prices are out of control. It's a passion of mine and I've had to hunt for producers and areas of relative value. Not only me but I speak to people on social media and the price producers charge certainly comes up and is a huge factor in whether to purchase from one Village or producer versus another. It also impacts our decisions to purchase one vintage versus another.

Anyone who doesn't think this is a tax on American consumption of Burgundy and Bourdeaux is nuts

Trump also said American wine is better than French wine because the bottles look nicer.

abend237-04
abend237-04

Macron has simply built a 21st century toll booth, the first one on bits and bytes. Unfortunately, it will have the same effect as all other tool booths and bridges throughout human history...restraint of trade and lowering of living standards of all involved.

shamrock
shamrock

There are hundreds if not thousands of French wines available in the US for under $10. Price is very much relevant.

shamrock
shamrock

Hasn't Trump tweeted about 100 times how facebook,twitter, and google are out to get him? Now they are "Great American Technology companies"?