Trump threatens 100 per cent tax on EU imports over digital services tax

President Donald Trump has threatened to impose a 100% tariff on imports from any country that levies digital services taxes on US tech companies, singling out European nations. Britain already enforces a 2% digital services tax on major online firms.

Washington: President Donald Trump on Friday threatened a 100 per cent tax on imports from any country that imposes a tax on digital services from United States companies.

In a post on social media, Trump took aim at European countries that he said are discussing “imminent” implementation of taxes on American companies. The US president has repeatedly sought to use tariffs as way to deter such taxes, but many countries are looking for revenues as their economies increasingly operate in digital realms that are dominated by American companies.

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“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 United States of America,” Trump wrote.

He added that the new tax would supersede any previously negotiated trade deals. Trump said the penalty would apply to any country that moves forward with such a tax, but he singled out European nations in his post.

Trump 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.”

The threat comes ahead of Trump’s July 4 deadline for the European Union and United States to start implementing a tariff deal that caps tariffs on most EU exports at 15 per cent.

The European Union in May finalised a trade deal with the United States that caps most tariffs on EU exports at 15 per cent. The deal followed months of debate within the EU after European Commission chief Ursula von der Leyen tentatively struck the deal last year while visiting Trump’s golf course in Scotland.

Digital taxes were not part of the agreement and have remained a sticking point between the US and the European bloc.

The US government has in the past had tariff investigations on digital services taxes under Section 301 of the Trade Act of 1974. But it was unclear how Trump would enact his threat and whether he would apply the tariffs broadly or target them initially at certain nations.

Britain, which is no longer part of the EU, has since 2020 levied a 2 per cent digital services tax on revenues earned by search engines, social media sites and online marketplaces that “derive value” from UK users.

The British government said in a policy document at the time that corporate tax rules for digital businesses had “led to a misalignment between the place where profits are taxed and the place where value is created.”

The UK tax includes thresholds that mean mainly big international companies will pay it. The tax was designed to “ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services,” the document said.