The G7 Leaders Declaration in the wake of the summit held in Biarritz was the usual mix of the obvious and the anodyne. On the subject of taxation, it said: “The G7 commits to reaching in 2020 an agreement to simplify regulatory barriers and modernize international taxation within the framework of the OECD.”
However, on the sidelines of the meeting it appears that Presidents Trump and Macron have come to some agreement over France’s digital tax and Trump’s threat to put tariffs on French wine – a threat that had been described by Didier Guillaume, French Agriculture and Food Minister in a TV interview on 30 July as ‘complètement débile’ [which you may translate as anything between ‘completely stupid/dumb/moronic’].
Speaking to reporters ahead of a meeting in Biarritz with Egyptian President Abdel Fattah el-Sisi, Trump said: "Am I gonna tariff French wine? Well, it depends on the deal we work out on the digital tax." Ahead of the G7 summit, Trump had said Macron must drop his ‘unfair’ digital tax or ‘we’ll be taxing their wine like they’ve never seen before’.
However, it seems a wine war may have been averted. President Macron tweeted on 26 August: “Some digital players pay very little tax. This is an injustice that destroys jobs. @realDonaldTrump and I have just agreed to work together on an agreement at the @OECD level to modernize international tax rules. #G7Biarritz”
Reuters reports French Finance Minister Bruno Le Maire as saying he had agreed with US Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow that France would offer a tax credit to companies for the difference between the French tax and the planned international mechanism being drawn up by the OECD.