Trump outlines 100% tariff plan over European digital tax moves
US president says countries imposing levies on American tech firms will face tariffs that override any trade deal, as EU tensions rise.
- President Trump threatened a 100% tariff on all goods from any country that imposes a digital services tax on American companies.
- The proposed tariff would supersede any existing trade agreements, regardless of whether they are signed or implemented.
- This warning is a direct response to European nations, such as France, that have implemented or are considering taxes on the revenue of large digital companies.
- France, which has a 3% digital tax, was specifically targeted with a threat of 100% tariffs on its wine if the levy is not removed.
US President Donald Trump on Friday (June 26) warned that any country imposing a digital services tax on American companies would face a 100% tariff on all goods shipped to the United States, escalating transatlantic trade tensions a day after European Union countries met his 4 July 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.”
He added: “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 said the tariff would take precedence over any trade agreements with the US, “whether implemented, signed or not.” That would include the deal agreed by the US and EU last year, which limits US tariffs on European goods to 15% in return for EU countries lowering tariffs on US industrial goods to zero.
The threat followed a lengthy EU legislative process to fulfil the bloc’s commitments under the deal. Trump had warned he could reimpose a 25% tariff on European imports, including cars, before EU lawmakers moved quickly to meet his 4 July deadline.
French President Emmanuel Macron said last week, before meeting Trump at a G7 summit, that France would not yield to pressure from him and abandon its digital tax on US technology giants. The services covered by the tax include online marketplaces and advertising.
Before leaving for the summit in France, Trump also warned that the US would “have no choice” but to impose 100% tariffs on French wine unless Paris removed its digital levy.
France has imposed a 3% levy since 2019 on revenue generated in France from digital services provided by companies with more than €25 million in French revenue and €750 million (US$854.02 million) in worldwide revenue. French lawmakers last year proposed raising the tax to 6%.
The office of the US Trade Representative has long threatened retaliatory tariffs against France, Britain, Austria, Spain and other European countries if they impose digital services taxes, arguing that such levies discriminate against US companies, which dominate the sector globally.
Exchange rate: US$1 = €0.8782.
Reuters
