On January 29, 2021, US Treasury Secretary Janet Yellen and French Finance Minister Bruno Le Maire signaled a renewed commitment to reducing trade tensions and fostering cooperation, marking a departure from the contentious US-France relations during the Trump administration.

The French Finance Ministry highlighted “many convergences” in their priorities, particularly on climate, international trade, and multilateral cooperation within the G7 and G20 frameworks.

Background of Disputes

Under former President Donald Trump, the US and France clashed over France’s digital services tax, which targeted large US tech companies.

In 2019, the Trump administration imposed 25% tariffs on French, Spanish, and German wines (under 14% alcohol) in retaliation for EU subsidies to Airbus.

Additionally, in June 2020, former Treasury Secretary Steven Mnuchin declared an “impasse” in OECD-led talks on a global tax framework for tech companies, threatening retaliatory measures if the EU proceeded with its taxes. Le Maire called Mnuchin’s remarks a “provocation” to the OECD process.

Renewed Commitment to OECD Talks

In their recent discussions, Yellen expressed the Biden administration’s commitment to “active US participation” in ongoing OECD negotiations aimed at overhauling rules for taxing cross-border commerce.

This shift contrasts with the US’s withdrawal from these talks under Trump, offering hope for a unified global approach to digital taxation.

Impact on French Wine Industry

Le Maire emphasized the “very penalizing nature” of US tariffs on French winegrowers, which have caused significant economic harm. In 2020, these tariffs led to an estimated €500 million in losses for the French wine sector.

The ministers’ focus on reducing trade tensions suggests potential relief for affected industries, though specific resolutions remain pending.

Strengthening Multilateral Ties

Both Yellen and Le Maire underscored the importance of reviving multilateral relations strained by Trump’s unpredictable diplomacy.

Their discussions highlighted cooperation in international forums like the G7 and G20, aiming to rebuild trust and align on shared priorities such as climate action and fair trade practices.

Future Engagement

Le Maire plans to visit Washington, D.C., “as soon as sanitary conditions allow,” signaling a desire to deepen bilateral cooperation.

The commitment to dialogue and OECD engagement reflects a broader effort to stabilize transatlantic relations and address global economic challenges collaboratively.