French lawmakers have voted to double a key tax on major US technology companies, setting the stage for possible trade clashes with President Donald Trump. The move, part of the 2026 budget bill discussions in Paris, raises the digital services tax from 3 percent to 6 percent on firms like Amazon, Google, and Meta, amid warnings of US retaliation through tariffs.
This decision comes as France seeks more revenue from tech giants that earn big in the country but pay little in taxes. Lawmakers in the lower house approved the change on October 29, 2025, despite pushback from some officials who fear it could spark a trade war. Trump has long criticized such taxes as unfair attacks on American businesses, and recent reports suggest he might respond with duties on French goods like wine or luxury items.
Details of the Tax Increase
The amendment targets companies with global revenues over 750 million euros and French digital sales above 25 million euros. It focuses on income from online ads, data sales, and platform services.
This is not the first time France has pushed such a levy. Introduced in 2019 at 3 percent, it has already brought in hundreds of millions of euros each year. The hike to 6 percent could add up to 500 million euros more annually, based on current estimates from financial analysts.
Lawmakers backed away from an even bolder plan to raise it to 15 percent, choosing a middle ground to balance budget needs with trade risks. The full budget bill vote might happen in November or December 2025, and the government lacks a majority, making the outcome uncertain.
Experts say this reflects growing global efforts to make tech firms pay fair shares where they operate. Similar taxes exist in countries like the UK and India, but France’s version has drawn the most US ire.
Trump’s History of Retaliation Threats
President Trump has repeatedly vowed to fight back against taxes he sees as biased against US companies. In August 2025, he threatened action over similar digital levies in the EU and UK, claiming they ignore bigger issues with China.
Back in 2019, when France first rolled out the tax, Trump approved tariffs on 1.3 billion dollars worth of French products, though a truce paused them. Recent statements from Trump allies in Congress warn that a hike could force “aggressive retaliatory actions,” such as duties on French exports.
Republican lawmakers have called the potential 15 percent increase an “unwarranted attack,” but even the 6 percent bump might trigger responses. Trade experts predict Trump could use tools like the World Trade Organization rulings or US trade laws to impose penalties.
This fits into Trump’s broader “America First” trade policy, which has targeted allies and rivals alike. For instance, in June 2025, he blasted Canada’s digital services tax as a “direct attack” on US tech, hinting at broader countermeasures.
Impact on Major Tech Companies
US tech giants stand to feel the pinch from this tax doubling. Amazon, Google, and Meta generate billions in France through e-commerce, search, and social media.
Here are some key firms affected:
- Amazon: Faces higher costs on its marketplace and cloud services.
- Alphabet (Google): Hit on ad revenues and app store sales.
- Meta (Facebook): Taxed on user data and advertising income.
- Apple: Could see impacts on its services like the App Store.
A table below shows estimated annual tax payments before and after the hike, based on 2024 revenue data:
| Company | Current Tax (3%) Estimate | New Tax (6%) Estimate |
|---|---|---|
| Amazon | 150 million euros | 300 million euros |
| 200 million euros | 400 million euros | |
| Meta | 120 million euros | 240 million euros |
| Apple | 100 million euros | 200 million euros |
These figures come from industry reports and could vary with actual sales. Tech leaders argue the tax duplicates global efforts like the OECD’s minimum corporate tax deal, which aims for fairer international rules by 2026.
Smaller firms and startups might benefit indirectly if giants pass on costs, but critics say it could slow innovation in Europe.
French Government’s Cautious Approach
Finance Minister Roland Lescure has voiced caution, saying the government will work with parliament to refine the bill. Spokeswoman Maud Bregeon noted that debates are ongoing and the current votes are not final.
President Emmanuel Macron’s administration has no parliamentary majority after recent elections, forcing compromises. They avoided using special powers to force the bill through, opening the door for changes.
Supporters in parliament argue the tax is vital for funding public services amid budget shortfalls. France faces a deficit projected at 6 percent of GDP in 2025, pushing lawmakers to find new revenue sources.
Broader Global Trade Implications
This tax hike could reignite transatlantic tensions at a time when global trade faces challenges from inflation and supply chain issues. The US and EU have clashed over subsidies and tariffs, with tech taxes adding fuel to the fire.
Analysts predict ripple effects, such as higher consumer prices if companies raise fees. It might also speed up international agreements on digital taxation, as the OECD pushes for a unified approach.
In related news, Canada’s recent digital tax drew Trump’s criticism, showing a pattern of US pushback. If France proceeds, it could encourage other nations to follow suit or back down under pressure.
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