The US President Donald Trump and French President Emmanuel Macron have agreed to hold the tariffs on French wine until the end of this year.
Last December, the US government announced that it is planning to implement 100% tariffs on $2.4bn worth of French goods as a response to France’s digital services tax.
The tariff will be implemented on wine and other French products, such as Le Creuset Dutch ovens, Hermès handbags and Roquefort cheese, announced Trump.
US-based wine importers protest that Trump’s tariff decision on French wine will impact their livelihoods.
The digital service tax is aimed at American companies such as Google, Apple, Facebook and Amazon (GAFA).
The French government also previously announced it will be imposing a 3% tax on the annual revenues of the US-based technological companies.
However, recent discussions between the Presidents have reportedly calmed the situation to some extent.
According to French diplomatic personnel, who addressed various media agencies, Macron and Trump have agreed to hold the tariff implementation plans and focus on continuing negotiations on digital tax at the Organisation for Economic Cooperation and Development (OECD).
President Macron tweeted saying he had a ‘great discussion’ with President Trump and that the two countries would ‘work together on a good agreement to avoid tariff escalation.’
Currently, a 25% tariff has been implemented by the US government on French wine due to Airbus trade dispute.