French and American negotiators have reached an agreement on France’s digital tax law, Reuters reported Monday.
A source close to the negotiations told the outlet that the deal made between French Finance Minister Bruno Le Maire, U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow would have France repay companies the difference between a French tax and a planned mechanism being drawn up by the Organization for Economic Cooperation and Development.
The draft agreement will reportedly be given to President Trump and his French counterpart Emmanuel Macron during the Group of Seven summit Monday.
{mosads}“Trump’s adviser is OK with the proposal,” the source told Reuters. “That would be the mechanism at this stage, that’s the joint proposal.”
The new French law places a 3 percent tax on yearly revenues of technology companies that make at least 750 million euros annually and provide services to users in France, affecting companies such as Apple, Google, Facebook and Amazon.
Those companies have said the tax unfairly affects U.S. businesses and could harm their operations.
Trump has threatened to put a tariff on imported French wines in response to the tax.
“France just put a digital tax on our great American technology companies,” he tweeted last month. “We will announce a substantial reciprocal action on [French President Emmanuel] Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”
The European Union has promised to “respond in kind” if such a tariff is levied.