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Trump and Macron Reach Tariff Truce to Avoid Trade War in 2020

France imposed digital revenue tax on many American companies last year and Trump threatened to hit back with high tariff rates on French goods.

President Donald Trump and French President Emmanuel Macron agreed to a truce in their digital-taxes disputes, Bloomberg reported Monday.

Macron tweeted that he had a “great discussion” with Trump, adding, “We will work together on a good agreement to avoid tariff escalation.” The two leaders reportedly agreed to hold off on imposing punitive tariffs until the end of this year as they continue negotiations along with European partners in an effort to ensure tech companies pay sufficient taxes, a French diplomat said.

The two countries were on the brink of a trade war after Macron imposed digital revenue tax on many American companies last year and the U.S. threatened to hit back with tariffs as high as 100% on $2.4 billion worth of French goods. French Finance Minister Bruno Le Maire said earlier on Monday that the talks were “one of the most difficult negotiations I’ve ever been involved in.”