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President Trump has threatened to slap a 100% tariff on any country that imposes a digital services tax on US tech companies.
Some shit you should know before you dig in: If you’re unaware, some EU countries have been weighing a digital services tax, which is essentially a tax on the revenue that big tech companies earn inside their borders, rather than on profit. It’s designed to take money from firms that do huge business in a country without having much of a physical presence there. The whole point is to get around a long-standing problem for European governments, which is that companies like Google, Facebook and Amazon have historically been taxed on profit that ends up parked in low-tax havens like Ireland or Luxembourg, leaving the countries where the actual users and sales are located with little to show for it.
What’s going on now: In a Truth Social post Friday, Trump pointed to European nations weighing such taxes, writing 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 said the tariff would take immediate effect and would “supersede” any trade deal, “whether implemented, signed, or not.”
The European Commission pushed back, saying the taxes are “non-discriminatory by design” and warning it would “respond swiftly and decisively to defend its rights.”
The threat lands just a day after the bloc met Trump’s July 4 deadline to bring down tariffs on US goods under a deal finalized last month that caps most EU tariffs at 15%. Digital taxes were never folded into that agreement and have been a sore spot ever since, so Trump’s warning effectively threatens to blow up an accord that took months to conclude.
This comes as some European countries already levy such taxes, including France, which has had a 3% tax on the books since 2019, along with Britain, Italy, and Spain.
