Macron, Trump Agree To Hold Off Tit-For-Tat Tariffs

U.S. President Donald Trump and French President Emmanuel Macron have agreed to a truce on their ongoing digital tax dispute.

What Happened

The United States and France have agreed that neither country will impose punitive tariffs until the end of 2020.

Macron called Trump on Sunday to find common ground on the issue of taxing tech giants like Alphabet Inc.'s GOOGGOOGL Google.

“The two leaders agreed it is important to complete successful negotiations on the digital services tax, and they also discussed other bilateral issues,” a White House spokesperson said in a written statement.

Macron tweeted on Monday he had a “great discussion” with Trump and they will “work together on a good agreement to avoid tariff escalation.”

“They agreed to give a chance to negotiations until the end of the year,” sources told Reuters. “During that time period, there won’t be successive tariffs."

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Why It Matters

The truce comes around six months after France imposed a 3% digital services tax on U.S. tech giants like Google, despite threats of retaliation by the U.S. The move started a trade spat between France and the U.S.

Following the move, the Trump administration threatened to impose 100% tariffs on French goods.

French Finance Minister Bruno Le Maire responded by saying, “The European Union would be ready to retaliate.”