US President Donald Trump on Friday threatened countries imposing a digital services tax (DST) on American companies with a 100 per cent tariff, saying it will suspend any US trade deal with that nation.
In a post on social media, Trump took aim at European countries that he said are discussing “imminent” implementation of taxes on American companies.
“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. This TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not. Additionally, the 100% TARIFF will be immediately imposed if they proceed,” he wrote on Truth Social.
Trump’s new threat is unlikely to impact India as New Delhi ended some of its DST levies in 2024 and 2025. According to the White House, India will fully remove DST under the trade deal currently in negotiations with the US.
Proponents of special taxes on big tech firms argue that the goal is to force them to pay taxes where they do business, as well as to counter tax optimisation strategies.
Trump’s crusade against the Digital Services Tax
The Republican has repeatedly pushed against foreign efforts to tax or regulate American tech giants. Last year, he threatened new tariffs on any country that moved to do so. A post from last August said that digital taxes and regulation “are all designed to harm, or discriminate against, American Technology.”
Earlier this month, Trump threatened to slap a 100 per cent tariff on French wine and champagne unless Paris removes a digital services tax on tech firms. France imposed in 2019 a three per cent levy on the revenues earned by technology firms — including American giants such as Facebook, Amazon, Apple and Google parent Alphabet — within the country’s borders.
Canada scrapped its digital services tax last year to salvage trade talks with the United States, following pressure from Trump.
