The US government is considering slapping French goods with more tax in retaliation to France's digital services tax, the BBC has reported.
US trade officials contend that the digital services tax unfairly penalises Google, Facebook, and Amazon.
Products set to be hit by the US retaliatory 100 % tariffs are cheese, champagne and handbags.
France responded by saying that the retaliatory tax was unacceptable.
"It is not what one would expect from an ally, it is not what one would expect from the United States. In case of new American sanctions, the European Union would be ready to riposte," the finance minister Bruno Le Maire told French radio on Tuesday according to Cable News Network (CNN).
The French digital services tax levies a 3% tax on the revenues earned by tech companies operating in France.
Players in the tech industry have welcomed the move by the US to retaliate, criticising the French tax as a barrier to innovation.
"Discriminatory digital services taxes act as a trade barrier for innovative American companies and small businesses often face the biggest burden from them, " the Internet Association said according to CNN.
About $2.4 billion worth of French goods will be subject to the American 100 % tariffs according to the Guardian.