Jan 20, 2020 - Economy

Macron and Trump call ceasefire on digital taxes and wine tariffs

Trump and Macron on Dec. 3.

Macron and Trump on Dec. 3, 2019. Photo: Ludovic Marin/POOL/AFP via Getty Images

French President Emmanuel Macron on Tuesday tweeted that he and President Trump held a “great discussion” on a tax on digital services considered by Paris and pledged to work on "a good agreement" with Washington "to avoid tariff escalation."

Why it matters: Macron and Trump agreed to avoid increasing tariffs and continue negotiations on the digital tax during until the end of the year, CNBC reports.

Context: France in July enacted a tax on companies that profited from digital services in the country.

  • The White House in December issued a report concluding that France's tax discriminated against U.S. digital companies and announced that it was considering tariffs as high as 100% on up to $2.4 billion worth of French products, including sparkling wines, cheeses and handbags.
  • The announcement came hours before Trump was headed to the World Economic Forum at Davos, Switzerland, and days after Trump signed a reprieve in the 18-month trade war with China.

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