According to a French diplomat, French President Macron and US President Trump have agreed on a truce in their dispute over digital taxes that will mean neither side imposes punitive tariffs this year.

As a reminder, France decided in July to apply a 3% levy on revenue from digital services earned in France by firms with revenues of more than 25 million euros ($28 million) in France and 750 million euros worldwide.

After concluding that the tax on digital revenues - that hits large American tech companies including Google, Apple, Facebook and Amazon.com - unfairly discriminated against US tech companies, the Trump administration had threatened to impose 100% tariffs on up to $2.4 billion of French imports, including champagne.

But, if the diplomat and Macron's tweet are to be believed, both sides have de-escalated...

“Great discussion with @realDonaldTrump on digital tax,” Macron said in a tweet.

“We will work together on a good agreement to avoid tariff escalation."

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

The dollar dipped back to unchanged on the news...

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The two countries will continue negotiations along with their European partners until the end of 2020 in order to agree on a global framework that ensures tech companies pay an appropriate amount of tax, the diplomat said.