Section 301, under an outdated U.S. trade law adopted in 1974, allows the U.S. president to unilaterally impose tariffs or other trade restrictions on foreign countries.

"France is a sovereign country, its decisions on tax matters are sovereign and will continue to be sovereign," Le Maire said.

"Between allies, I believe we can and must resolve our differences in a way other than through threats," he said.

"We will have the G7 finance ministers in the next 10 days in Chantilly (in northern France), the U.S. secretary of the treasury will be there. Let's speed up the work at the international level, find a common solution, find an alternative at the OECD (Organization for Economic Co-operation and Development) level and go through agreements rather than menaces," he stressed.

Can the tax work?

French President Emmanuel Macron's government had pushed ahead on its own to impose the digital tax to "build the taxation of the 21st century", although questions have already arisen on whether it will really work.

According to the French Senate's Finance Committee, the digital tax "is not perfect economically, since it taxes the turnover and not the profits and it is too complicated to be implemented".

"This new tax must be seen as a palliative, pending a multilateral decision," the Finance Committee said.

According to economist Nicolas Doze, the government's new tax is "a good political message but a bad fiscal tool".

"Taxing the turnover before the companies realize a single euro in profit is an economic nonsense. Furthermore, it is the consumers who will shoulder the consequences as (the affected companies) will pass this tax on in their prices," Doze told the news channel BFMTV in a recent interview.

"It is also a headache for the finance ministry. How it will collect this tax and define a fiscal basis with the companies' turnover data is very hard to tell," he added.

Other experts suggested that France's move was a promising debut to broader tax rules for the digital era.

"There are experts who say that France should not tax revenue and others say that this tax will be practically impossible to enforce. All this is true, but ... what is new and significant is that the world's powers, such as the U.S., China and India, agreed to impose the GAFA tax," said Alain Duhamel, a political analyst.

Speaking on RTL radio, Duhamel noted that the OECD's draft deal to propose a tax at international level "has chances to be adopted" in a way that could transform the French proposal from "an isolated initiative into a true change of power balance."

An accord on overhauling cross-border tax rules for the digital era in the OECD countries is expected by the end of 2020. (1 euro = 1.12 U.S. dollars)

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