US President Donald Trump has threatened to impose a 100% tariff on imports from any country that adopts a digital services tax, which he says targets American companies.
In a post on his social media platform Truth Social on Friday, Trump said several European countries are discussing the imminent implementation of digital services taxes on US firms, with some close to adopting the measures.
"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," he wrote.
"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," Trump said.
Last week, hours before the two met at the G7 summit, French President Emmanuel Macron said France would not bow to pressure from Trump and scrap its digital tax on US tech giants.
Before setting off for the summit in France, Trump had warned that the US would "have no choice" but to apply 100% tariffs on French wine unless Paris eliminated its digital tax.
France has applied a 3% levy since 2019 on revenue from digital services earned by companies with revenues of more than €25 million in the country and €750 million worldwide.
Digital taxes vs traditional tax
Tech companies such as Google, Meta and Amazon generate significant revenue from European users through advertising, data and digital platforms, yet often pay limited tax locally due to their lack of physical presence.
Digital services tax, usually set at around 2 to 3 percent of revenue, allow governments to tax income where it is generated, rather than where corporate headquarters or servers are based.
They are also designed to address a perceived imbalance.
Local firms tend to pay standard corporate taxes, while large multinational tech companies can shift profits to low-tax jurisdictions such as Ireland.
Digital services tax, its proponents argue, help recover part of that lost revenue and support public finances.
Beyond economics, the taxes carry a political edge. With slow progress on global tax reform, countries including France, Italy and the UK have introduced unilateral measures as interim solutions, signalling willingness to act independently while keeping pressure on negotiations for a broader international agreement.
