Donald Trump Threatens 100% Tariff on Countries Levying Digital Services Tax on American Companies

U.S. President Donald Trump threatened on Friday to impose a 100 percent tariff on any country that levies a digital services tax on American companies, saying the measure would be triggered by “Numerous European Countries” discussing “the imminent implementation of a Digital Services Tax on American Companies.”

“United States President Donald Trump has threatened to impose a 100 percent tariff on any country that implements a digital service tax on US tech companies, adding that the new tariffs would override any previous agreements”

Al Jazeera

In a Truth Social post, Trump wrote, “Please let this statement serve to represent that any country that imposes such a tax will immediately be met with a 100% tariff on any and all goods sent to the United States of America,” and he added that the tariff would override trade deals.

Al Jazeera

Trump’s warning came as the European Union finalized a trade deal just days earlier, with the New York Times reporting that Trump threatened to scrap that agreement over digital services taxes.

The New York Times also said Trump claimed the tariffs would override a trade deal with the European Union, and that the U.S. would “immediately” impose a 100 percent tariff if a country proceeded with the tax.

Business Standard reported that the proposed tariff could affect a U.S.-EU trade deal agreed last year under which US tariffs on European goods were capped at 15 per cent in return for the EU reducing tariffs on US industrial goods to zero.

The European Commission responded to Trump’s threat by arguing that member states and the bloc have “the sovereign right to regulate economic activities on their territory,” while a commission spokesperson said “Any taxes are non-discriminatory by design and apply equally to all large companies, regardless of their origin.”

The Hill reported that the European Commission said “Unilateral measures targeting such legitimate policies are unjustified,” and warned that “If pursued, the EU will respond swiftly and decisively to defend its rights and regulatory autonomy.”

CBS News

The New York Times said it was unclear how quickly Trump could impose any such levies, pointing to a February Supreme Court decision striking down tariffs issued last year using an emergency law.

The New York Times also noted that the United States has investigated digital service taxes in France, Austria, Spain and Italy in the past using a legal provision known as Section 301.

CBS News added that Trump said the 100% import duty would be imposed immediately if a country proceeded with a digital services tax, while also describing the tax as aimed at companies that do business in a country but lack a physical presence there.

Trump’s tariff threat is tied to a broader dispute over digital services taxes and trade commitments, with the Gulf News reporting that the move came just a day after EU countries gave the green light to a trade agreement negotiated last year that caps taxes on European imports at 15 percent.

“President Trump is threatening to impose a 100% tariff on countries that levy a tax on U”

CBS News

Gulf News also said Trump added that existing trade deals would be scrapped, while the New York Times reported that Trump said the tariffs would “supersede Trade Deals made with the Country, whether implemented, signed, or not.”

Business Standard said the EU-U.S. trade deal agreed last year capped US tariffs on European goods at 15 per cent and set EU reductions on US industrial goods to zero, and it described EU delays in implementing commitments that prompted Trump to threaten reimposing a 25 per cent tariff on European imports including automobiles.

The Hill reported that Trump set a July 4 deadline for the European Union and the U.S. to finalize a trade deal that caps tariffs on most EU exports at 15%, while digital taxes remained a sticking point between the U.S. and the European bloc.

In the same reporting, CBS News said digital taxes were not part of the agreement and that Trump also threatened retaliation against countries that propose digital taxes during his first term, including through U.S. Trade Representative investigations into nine European Union countries in 2020.