Trump threatens 100% tariff on countries imposing digital services tax

The US president said any country levying a digital services tax on American companies would face sweeping tariffs, escalating tensions with Europe despite progress on a broader trade deal

US President Donald Trump on Friday threatened to impose a 100 per cent tariff on goods from any country that levies a digital services tax on American companies, escalating transatlantic trade tensions a day after European Union (EU) countries moved to meet Washington's July 4 deadline to reduce tariffs on US goods.

 

"Numerous European countries have been discussing the imminent implementation of a Digital Services Tax on American Companies," Trump said in a social media post. "Some of these countries are close to actually doing this."

 

"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," he added.

 

 

Trump said the proposed tariff would override any existing or future trade agreements with the United States.

 

The move could affect the US-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. Delays in implementing the EU's commitments had already prompted Trump to threaten reimposing a 25 per cent tariff on European imports, including automobiles, before EU lawmakers rushed to meet his July 4 deadline.

 

French President Emmanuel Macron said last week, ahead of a meeting with Trump at the G7 summit, that France would not bow to pressure to scrap its digital services tax on US technology companies. The levy applies to digital services such as online marketplaces and advertising.

 

Before travelling to the summit in France, Trump warned that the US would "have no choice" but to impose a 100 per cent tariff on French wine unless Paris withdrew the tax.

 

France has imposed a 3 per cent digital services tax since 2019 on revenue generated in the country by companies with annual digital services revenue exceeding €25 million in France and €750 million globally. French lawmakers last year proposed doubling the levy to 6 per cent.

 

The Office of the US Trade Representative has long opposed digital services taxes imposed by France, the UK, Austria, Spain and other European countries, arguing that they unfairly discriminate against US technology companies that dominate the sector globally.