Washington, United States. U.S. President Donald Trump said on Friday that any country imposing a digital services tax on American companies would face a 100% tariff on all goods sent to the United States. The warning escalated transatlantic trade tensions a day after European Union countries met Trump’s July 4 deadline to cut tariffs on U.S. goods.
Tariff threat over digital taxes
Trump made the announcement in a social media post, saying numerous European countries had been discussing the imminent implementation of a digital services tax on American companies and that some were close to doing so.
He said that any country imposing such a tax would immediately be met with a 100% tariff on any and all goods sent to the United States. Trump added that the new tariff would supersede any trade deals with the United States, whether implemented, signed or not.
Impact on U.S.-EU trade deal
Trump’s statement would include the deal the United States and the European Union agreed to last year. Under that agreement, U.S. tariffs on European goods are capped at 15% in exchange for EU countries reducing tariffs on U.S. industrial goods to zero.
A lengthy EU legislative process to meet the bloc’s commitments under the deal had prompted Trump to threaten to reimpose a 25% tariff on imports from Europe, including autos. EU lawmakers then moved quickly to meet Trump’s deadline to implement the changes by July 4.
France’s digital tax in focus
French President Emmanuel Macron said last week, before meeting Trump at a G7 summit, that France would not bow to pressure and remove its digital tax on U.S. tech companies. The taxed digital services include online marketplaces and advertising.
Before departing for the summit in France, Trump had warned that the United States would have no choice but to apply 100% tariffs on French wine unless Paris eliminated its digital tax.
France has applied a 3% levy since 2019 on revenue earned in France from digital services provided by companies with revenue of more than €25 million in the country and €750 million ($854.02 million) worldwide. French lawmakers last year proposed increasing the tax to 6%.
Broader U.S. response
The U.S. Trade Representative’s office has long threatened France, Britain, Austria, Spain and other European countries with retaliatory tariffs if they impose digital services taxes, arguing that the levies discriminate against U.S. companies, which dominate the sector globally.