Macron and Trump Declare a Truce on Digital Tax Dispute

January 20, 2020 Updated: January 20, 2020

PARIS—French President Emmanuel Macron said on Tuesday he had a “great discussion” with President Donald Trump over a digital tax planned by Paris and said the two countries would work together to avoid a rise in tariffs.

Macron and Trump agreed to hold off on a potential tariffs war until the end of the year, a French diplomatic source said, and continue negotiations at the The Organization for Economic Co-operation and Development (OECD) on the digital tax during that period.

“They agreed to give a chance to negotiations until the end of the year,” the source said. “During that time period, there won’t be successive tariffs.”

France decided in July to apply a 3 percent levy on revenue from digital services earned in France by firms with revenues of more than 25 million euros ($28 million) in France and 750 million euros (about $832 million) worldwide. Washington has threatened to impose taxes on French products in response.

French authorities have repeatedly said that any international agreement on digital taxation reached within the OECD would immediately supercede the French tax.

By Michel Rose