The Trump administration has threatened to impose 100 per cent tariffs on up to $2.4bn of French goods, including champagne, after concluding that the country's digital services tax unfairly discriminated against United States technology companies.
"USTR's decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on USA companies", United States Trade Representative Robert Lighthizer said in the department statement.
France's 3% levy applies to revenue from digital services earned by firms with more than 25 million euros ($27.86 million) in French revenue and 750 million euros ($830 million) worldwide.
The US move "sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies", said trade representative Robert Lighthizer.
The French digital tax aims prevent tech companies from dodging taxes by reporting their earnings in low-tax European Union countries.
The US has proposed a series of tariffs on some French products following an investigation into France's recently passed digital taxation laws. It'll then accept post-hearing rebuttals by January 14.
French wine and cheese are on the list of goods that could be targeted as soon as mid-January, as well as handbags, porcelain, yoghurt and other French products.
But Trump never formally endorsed that deal and declined to say whether his French tariff threat was off the table.
Earlier Monday, French Finance Minister Bruno Le Maire appeared to not have much confidence in the DST going over well with the Trump administration and predicted Washington was likely to respond with tariffs.
"We respectfully urge the United States, France, and all participating governments to focus on a successful and lasting tax policy resolution" at the Organization for Economic Cooperation and Development (OECD), she said in a statement.
"We can see that the United States is shifting into reverse".