The United States is arguing that a digital services tax approved by France is unfairly targeting American tech giants like Google and Facebook.
According to the BBC, the 3% tax will be levied on sales generated in France by multinational firms that are headquartered outside the country.
The French government says they pay little or no tax.
The US administration has ordered an inquiry into the move – which could result in retaliatory tariffs.
Passage of this tax means that any digital company with revenue of more than 750 million Euros – of which at least 25 million Euros is generated in France – would be subject to the levy.
It will be retroactively applied from early 2019, and is expected to raise about 400 million Euros this year.