Trump threatens 100% tariff on any country that imposes digital services tax

[WASHINGTON] US President Donald Trump threatened on Friday (Jun 26) a 100 per cent tariff on all goods from any country that imposes a digital services tax on American companies, inflaming transatlantic trade tensions a day after European Union countries met Trump’s Jul 4 deadline to cut 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 per cent tariff on any and all Goods sent to the US of America.”

Trump said the new tariff would supersede any trade deals with the US, “whether implemented, signed or not”.

That would include the deal the US and EU agreed to last year, which caps US tariffs on European goods at 15 per cent in exchange for EU countries reducing tariffs on US industrial goods to zero. But a lengthy EU legislative process to meet the bloc’s commitments under the deal prompted Trump to threaten to reimpose a 25 per cent tariff on imports from Europe, including autos. EU lawmakers then scrambled to meet a deadline from Trump to implement the changes by Jul 4.

French President Emmanuel Macron said last week, before meeting with Trump at a G7 summit, that France would not bow to pressure from him and scrap its digital ​tax on US tech giants. The digital services it taxes include online marketplaces and advertising.

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Before setting off for the summit in France, Trump had warned that the US would “have no choice” but to apply 100 per cent tariffs on French wine unless Paris eliminated its digital tax.

France ​has applied a 3 per cent levy since 2019 on revenue earned in France from digital services provided by companies with revenue of ​more than 25 million euros (S$36.9 million) in the country and 750 million worldwide. French lawmakers last year proposed doubling the tax to 6 per cent.

The US 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 these levies discriminate against US companies, which dominate the sector globally. REUTERS