Presidents Emmanuel Macron and Donald Trump have agreed to extend negotiations on a dispute over a French tax on digital giants to the end of the year.

Macron and Trump postponed Washington´s threat of sanctions against Paris, sources said.

The source said the French and US leaders had agreed to give negotiations a chance to find a solution in an international framework and avoid “a trade war that will benefit no one”.

Macron tweeted earlier Monday that he had had a “great discussion” with Trump on the issue.

Advertisement

Great discussion with @realDonaldTrump on digital tax. We will work together on a good agreement to avoid tariff escalation.

— Emmanuel Macron (@EmmanuelMacron) January 20, 2020

“We will work together on a good agreement to avoid tariff escalation,” he said.

The White House said the two men spoke and agreed it is important to complete successful negotiations on the digital services tax, and they also discussed other bilateral issues.

The dispute began last year when Paris approved a levy on up to three percent of revenues earned by technology companies in France.

As international efforts dragged on to find a new model for taxing revenues earned via online sales and advertising.

Tech companies often pay little tax in countries in which they are not physically present.

Washington said the tax singled out US companies such as Google, Apple, Facebook, Amazon and Netflix.

They threatened duties of up to 100 percent of the value of French imports.

On emblematic goods such as Champagne and Camembert cheese.

On January 7, the two sides gave themselves 15 days to reach a deal to avert the US threat of duties on up to $2.4 billion of French goods.

France has said it would drop its tax if an international agreement reached.

After blocking the OECD talks for several years, Washington re-launched them last year.

It was done only to make proposals in December which France rejected.