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France and US compromise over a controversial tax on Google, Facebook, and other digital companies.

France and US compromise over a controversial tax on Google, Facebook, and other digital companies.

France and the US have set a two-week deadline to reach a compromise over a controversial digital tax, French finance minister Bruno le Maire told reporters Tuesday.

The French finance minister is set to meet US Treasury Secretary Steve Mnuchin at the World Economic Forum later this month. In the meantime, le Maire said that he had come to an agreement with Mnuchin “to redouble the effort in the coming days to find a compromise on digital tax,” the Financial Times reported.

It all started with Google, Facebook and Amazon’s giant digital presences in France. Because the American technology companies have little physical presence in the country, they pay less tax. Back in July, France passed a law designed to close that loophole, imposing a 3% tax on the revenue of companies providing digital services to its citizens.

The US immediately ordered an investigation into the French law, and ruled that the tax was “unreasonable” and discriminatory. American tech companies also came out swinging against the bill. And the Trump administration turned to tariffs as a solution, threatening to impose tariffs worth $2.4 billion on French imports, including some of the country’s beloved wines and cheeses.

A compromise on the tax could halt a potentially bitter trade dispute between the two countries. But if American tariffs are imposed before that happens, France has vowed to retaliate with its own tariffs.