The threat of punitive tariffs came after a U.S. government investigation found France's new digital services tax would harm USA technology companies, and will intensify a festering trade dispute between Europe and the United States.

The U.S. Trade Representative's office said its "Section 301" investigation found that the French tax was "inconsistent with prevailing principles of worldwide tax policy, and is unusually burdensome for affected U.S. companies", including Alphabet Inc's Google GOOGL.O , Facebook Inc FB.O , Apple Inc AAPL.O and Amazon.com Inc AMZN.O .

The trade office will accept public comments on the tariffs, which could hit 100%, through January 6 and hold a hearing January 7.

Earlier Monday, French Finance Minister Bruno Le Maire appeared to not have much confidence in the DST going over well with the Trump administration and predicted Washington was likely to respond with tariffs.

The U.S. tariffs and the French tax are likely to be a priority during a meeting between Trump and Macron on Tuesday, on the sidelines of a North Atlantic Treaty Organisation conference in London.

The findings won favor from US lawmakers and USA tech industry groups, who have long argued that the tax unfairly targets U.S firms.

"Indeed, USTR is exploring whether to open Section 301 investigations into the digital services taxes of Austria, Italy, and Turkey".

However, most of the targeted companies are US-based, including Google, Amazon and Facebook.

"The USTR is focused on countering the growing protectionism of European Union member states, which unfairly targets US companies", Lighthizer said.

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The tariff spat marks a new low in relations between French President Emmanuel Macron and Trump, who will meet on the sidelines of the North Atlantic Treaty Organisation summit later on Tuesday.

"We respectfully urge the United States, France, and all participating governments to focus on a successful and lasting tax policy resolution" at the Organization for Economic Cooperation and Development (OECD), she said in a statement.

The U.S. also criticized the French tax for targeting companies' revenue, not their profits, and for being retroactive. The two struck a compromise in August at a G7 summit in France that would refund US firms the difference between the French tax and a new mechanism being drawn up through the Organization for Economic Cooperation and Development.

President Trump also vowed to restore tariffs on steel from Brazil and Argentina.

Le Maire said France talked this week with the European Commission about EU-wide retaliatory measures if Washington follows through with the tariffs next month.

Le Maire disputes that, saying it targets European and Chinese businesses, too. It imposes a 3% annual levy on French revenues of digital companies with yearly global sales worth more than 750 million euros ($830 million) and French revenue exceeding 25 million euros.

France and the European Union are ready to fight back over the latest U.S. tariff threats on French products, French government ministers said on Tuesday (Dec 3).

"What we want is a plan for global tax that is on the table" at the Organization for Economic Cooperation and Development, Le Maire said.