The Trump administration threatened the possibility of slapping additional duties of "up to 100 percent on certain French products" in response to a digital services tax France has leveled against the U.S.
Products that could be hit with the new proposed tariffs include French wines, cheeses, beauty products, handbags and more.
In response to the digital tax, the USTR proposed additional tariffs on $2.4 billion worth of French goods, including additional duties of up to 100% on certain products.
The decision "sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies," USTR Ambassador Robert Lighthizer said in the statement.
The new proposed tariffs on French goods are currently open for public comment, and a committee will hold a public hearing on Jan. 7. The USTR "expects to proceed expeditiously thereafter," according to a statement.
Meanwhile, France's Finance Minister Bruno Le Maire called the new U.S. tariff threat "simply unacceptable," according to the Associated Press. "It’s not the behavior we expect from the United States toward one of its main allies,” he added.
Le Maire defended the digital tax as a way of forcing tech companies to pay their fair share of taxes instead of using countries as tax havens, the Associated Press reported.
The French Association of Wine and Spirit Exporters called on "urgent action" by their government in response to the U.S. tariff threats in a tweet Tuesday.
Stock also fell Tuesday for French luxury goods brands LVMH and Hermes International in the wake of the news.