Donald Trump has threatened a 100% tariff on any country that imposes a digital services tax on American tech companies, escalating trade tensions ahead of a key deadline.
Trump's Truth Social Warning
In a post on his Truth Social account, the US President wrote: "Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. 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."
Trump added that the new tax would override any trade deal with the US, "whether implemented, signed or not."
France at the Center of Dispute
The threat comes after French President Emmanuel Macron said last week that France would not bow to pressure from Trump and scrap its digital tax on US tech companies. He made the comments hours before the two met at the G7 summit in Evian-les-Bains, France, according to the Mirror.
Before the summit, Trump warned that the US would "have no choice" but to impose 100% tariffs on French wine unless Paris removed its digital tax. "I asked [Macron] not to charge American companies, and if they do, I have no choice but to charge a 100% tariff on all champagnes and all wines coming out of France," Trump told The New York Post. "All [Macron] has to do is get rid of the sales tax, and he wouldn't have that kind of pressure."
Background on Digital Services Tax
France has charged a 3% digital services tax since 2019 on revenue earned by companies generating more than €25 million in the country and €750 million worldwide. Trump has repeatedly pushed against foreign efforts to tax or regulate American tech giants.
Last year, he threatened fresh tariffs on any country that introduced such measures, writing on Truth Social in August that digital taxes and regulation "are all designed to harm, or discriminate against, American Technology."
Upcoming Trade Deadline
The latest threat comes ahead of Trump's July 4 deadline for the European Union and the US to approve a tariff deal that caps tariffs on most EU exports at 15%. The EU and the US struck the trade deal in July last year, with negotiations between Trump and European Commission President Ursula von der Leyen in Scotland bringing months of uncertainty to an end. Digital taxes were not part of the agreement and have remained a sticking point between the US and the European bloc.
