France is ready to go to the World Trade Organization to challenge U.S. President Donald Trump’s threat to put tariffs on Champagne and other French goods in a row over a French tax on internet companies, its Finance Minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches U.S. companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television.

Paris has long complained about U.S. digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3-per-cent levy on revenue from digital services earned in France by firms with more than €25-million ($36.6-million) in French revenue and €750-million worldwide.

It is set to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French Champagne, cheeses and luxury handbags, but France and the European Union say they are ready to retaliate in turn if Mr. Trump carries out the threat.

Mr. Le Maire said France was willing to discuss a global digital tax with the United States at the Organization for Economic Co-operation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Mr. Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.

Source: The Globe and Mail