France stuck to its plan to tax big multi-national tech companies, defying US President Donald Trump’s suggestion that he might impose tariffs on French wine.

“It is in all of our interest to move towards a just taxation worldwide for digital companies,” said French Finance Minister Bruno Le Maire in Paris. He added, “Wine tariffs and the digital tax are completely different issues and shouldn’t be lumped together,” he told reporters on Saturday.

It’s the latest face-off between the self-proclaimed Tariff Man in the White House and a major European Union economy. The French tax and Trump’s response threaten to further strain trans-Atlantic ties as the US and EU prepare to negotiate a limited trade agreement on industrial goods. Trump raised the possibility of substantial retaliation against France.

“It might be on wine, or might be on something else,” he told reporters in Washington. The law signed by French President Emmanuel Macron imposes a 3 per cent tax on the revenue of technology giants such as Facebook Inc and Amazon.com Inc. The tax, retroactive to January, affects companies with at least €750 million ($845 million) in global revenue and digital sales of €25 million in France. While most of the roughly 30 businesses affected are American, the list also includes Chinese, German, British and French companies. Trump said he may impose the wine tariffs before a meeting of the Group of Seven (G7) meeting in August.

Wine is France’s second-biggest export after aerospace equipment. The US is the biggest market, accounting for about a quarter of France’s €13.2 billion in wine exports last year.

While France is the first EU country to impose such a levy, it says it would prefer an EU-wide digital tax.

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