US Treasury Secretary Steve Mnuchin said: "We think the digital tax is discriminatory in nature. if people want to arbitrarily put taxes on our digital companies we'll consider arbitrarily putting taxes on vehicle companies".
"They have no choice", he said.
France, Australia, Austria and Poland have already introduced their own equivalent to the proposed digital services tax on a unilateral basis.
The US threatened it would consider retaliatory tariffs on United Kingdom vehicle makers if the measure goes ahead.
'If people want to just arbitrarily put taxes on our digital companies, we will consider arbitrarily putting taxes on vehicle companies, ' he warned.
"I think we have been pretty clear that we think the digital tax is discriminatory in nature", he said.
The issue, which both sides indicated was resolved January 20, has nonetheless been a lightning rod for a border transatlantic trade debate at the alpine conference this week. "I didn't want to go with China and Europe at the same time", he said.
They argue taxes should be based on where the digital activity takes place, not where firms have their headquarters.
"We plan to go ahead with our digital services tax in April", said British finance minister Sajid Javid, emphasising that the legislation would "fall away" if there was an global solution. But it left in place US tariffs on about $370 billion in Chinese goods, or about three-quarters of Chinese imports to the U.S.
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French Finance Minister Bruno Le Maire said after meeting Mnuchin in Davos that Paris would hold back on enforcing the tax until the end of the year, while the U.S. would defer its planned sanctions.
"We have not chose to withdraw our taxation - we have just proposed not have the prepayment of April and November", Le Maire said.
The UK tax, which was first announced previous year, is expected to bring in around £500m.
The U.S. has said that the French tax discriminates against American technology companies, citing Section 301 of a 1974 American law that Trump has thus far reserved to justify tariffs against China. He warned that the U.S. would consider retaliating in kind.
Among the French products targeted with duties of as much as 100% were luxury items like wine, cheese and makeup.
Set up in July, the French measure hits big internet companies including Google and Amazon with a 3% tax on the revenues from digital business made in France.
'This does require an global solution and that is something I think we all agree on, ' he said.
United Kingdom businesses warned that Chancellor Sajid Javid's vow to end alignment with the European Union would mean the "death knell for frictionless trade" for British businesses, as the Institute of Directors (IoD) found that directors are three times more likely to view negotiations with the European Union as a priority, versus signing up to new trade deals in other parts of the world.