Trump threatens 100% tariff on countries imposing digital services tax, EU vows swift response

The threat

US President Donald Trump on Friday threatened a 100% tariff on all goods from any country that imposes a digital services tax on American companies, raising the stakes in a long-running dispute over tech regulation. Writing on Truth Social, Trump said "numerous European countries" were discussing an imminent levy and that any such move would be met with an immediate penalty that supersedes existing trade deals.

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.

EU fires back

The European Commission responded within hours, calling the threatened measures "unjustified" and vowing a swift and decisive response. A spokesperson said the EU and its member states have the sovereign right to regulate economic activity and that digital taxes are non-discriminatory, applying to all large companies regardless of origin.

Unilateral measures targeting such legitimate policies are unjustified. If pursued, the EU will respond swiftly and decisively to defend its rights and regulatory autonomy.

Who has digital taxes?

France, Spain and Italy already impose a 3% digital services tax on large tech firms, while the UK levies 2% on social media platforms, search engines and online marketplaces with global revenues above £500m and UK revenue over £25m. The tax applies to US giants including Apple, Google, Amazon and Meta. The UK levy raised more than £800m in 2024-2025, up from £678m the year before, according to a Treasury review.

Trade deal backdrop

The threat came a day after EU countries formally approved a trade agreement negotiated last year by European Commission President Ursula von der Leyen, which caps tariffs on European exports to the US at 15% while US industrial goods enter the single market duty-free. The deal was meant to meet a July 4 deadline set by Trump for lowering tariffs. But the president has made clear he also wants to dismantle non-tariff barriers, including digital regulations he says harm American exports. Earlier this year he threatened France with a 100% tariff on wine if it did not scrap its digital tax.