U.S. President Donald Trump and French President Emmanuel Macron met over the weekend at the G-7 summit, and the two sides are reportedly close to reaching a compromise on France's new digital tax, CNBC reported Monday.
What Happened
France imposed a 3% tax on global tech giants in July that collects more than 750 million euros ($830 million) in annual revenue from digital activities. The new tax mostly targets big U.S. tech giants, including Amazon.com, Inc. AMZN and Facebook, Inc. FB.
Prior to leaving for the G-7 meeting, Trump told reporters that if France continues to unfairly target "great American companies," his administration will respond by "taxing their wine like they've never seen before."
France's economic minister Bruno Le Maire and Treasury Secretary Steven Mnuchin personally discussed the tax over the weekend, according to the French newspaper Le Figaro.
A draft agreement calls for France to refund a difference between the French tax and a new tax system created by the Organization for Economic Co-operation and Development.
Why It's Important
A source close to the matter told the French publication that Trump would approve a refund plan. Trump publicly said he wants to reach a deal with France to resolve what he considers to be an unfair tax.
What's Next
A final resolution to France's new tax could be complicated by broader geopolitical factors at play. Over the weekend, France quietly invited Iran's foreign minister Mohammad Javad Zarif to join the G-7.
According to Bloomberg this surprise move "risks infuriating" the U.S. administration.
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