Trump revives 100% tariff threat against countries with digital services taxes

Donald Trump threatened to impose a 100% tariff on imports from any country that levies a digital services tax on U.S. companies, reviving a long-running fight over how governments tax large tech firms.

The threat, posted on Truth Social, singled out European countries as the main target and said the tariff would apply immediately. Trump also said the action would override existing trade deals, escalating the dispute beyond a narrow tax argument and into a broader trade confrontation.

A fresh escalation

The move lands against the backdrop of unresolved U.S.-EU tensions over digital taxes. AP reported the latest threat came ahead of a July 4 deadline tied to the implementation of the U.S.-EU tariff deal reached in May, which caps most EU export tariffs at 15%. Digital taxes were not included in that deal and remain a separate sticking point.

The Wall Street Journal corroborated the threat and said Trump posted it on Truth Social on June 26. EL PAIS also reported on the same-day warning, describing it as part of a wider fight over Europe’s right to tax digital business activity.

Trump has repeatedly attacked digital services taxes as unfair to U.S. technology companies. The levies are typically applied to revenue from online advertising, marketplaces and other digital activity, and have been adopted or considered by several governments, especially in Europe.

The U.K. has imposed a 2% digital services tax since 2020, according to AP. The U.S. government has also previously investigated such taxes under Section 301 of the Trade Act of 1974, showing Washington has long treated the issue as both a tax dispute and a trade issue.

Brussels pushes back

The European Commission rejected Trump’s warning quickly. Spokesperson Olof Gill said unilateral measures against digital services taxes are unjustified and that the EU would respond swiftly and decisively if the United States followed through.

The Commission said digital-services taxation is non-discriminatory and applies to large companies regardless of where they are based. EL PAIS reported that the Commission also defended the EU’s right to regulate economic activity on its territory and said any response would be rapid and forceful.

That response sets up the possibility of a fresh U.S.-EU trade clash if Trump tries to move from threat to action. The Commission’s message also signals that Brussels is not prepared to retreat from the principle that member states can tax digital activity within their borders.

Why it matters

The threat raises the risk of higher costs and retaliation in transatlantic trade. A tariff of the size Trump described would create uncertainty for companies operating on both sides of the Atlantic and could put pressure on countries that rely on digital services taxes for revenue.

It would also add pressure on U.S. tech firms, which have repeatedly been the target of digital tax regimes. The issue remains politically sensitive in Europe, where lawmakers have discussed digital services taxes as a possible budget revenue source of about 5 billion euros annually, according to EL PAIS.

The broader U.S.-EU trade arrangement remains unfinished on this issue. AP reported that digital taxes were not part of the May deal, leaving the question unresolved even after the tariff agreement lowered some immediate trade tensions.

What comes next

The main open questions are whether the Trump administration would name specific countries first, what legal authority it would use to impose a tariff of this kind, and whether any European governments would change course.

For now, the immediate reaction from Brussels suggests a firm standoff rather than compromise. If the White House turns the threat into policy, the dispute could quickly widen into a broader U.S.-EU trade fight involving tariffs, tax policy and regulatory sovereignty.

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