“Many European countries are discussing the imminent implementation of a digital services tax on American companies. Some of these countries are actually close to doing so,” Trump wrote on Truth Social. “Please use this statement to indicate that any country that imposes such a tax will immediately be imposed a 100% tariff on any and all goods shipped to the United States. This tariff will supersede trade deals made with the country, whether in effect, signed or not. Additionally, if they proceed, the 100% tariff will be immediately imposed.”
Digital services taxes (DSTs) are typically taxes that countries impose on the gross revenues of companies operating in their jurisdictions, and have been used to specifically target US big tech companies like Google, Apple, and Amazon that trade globally but do not pay significant taxes in all jurisdictions. Countries like France, Italy, Spain, and the United Kingdom have implemented versions of DST to recoup some of the money earned by these tech giants by doing business within their borders.
The Trump administration has taken issue with these taxes because, in its view, they unfairly target American companies. They are almost certainly trying to protect these firms after the companies poured money into Trump’s presidential campaign and inaugural fund, and continue to be friends with the president despite putting them through repeated public humiliation rituals.
Trump has previously successfully used the threat of economic penalties to derail DST efforts. The Canadian government backed a proposal to implement DST after Trump warned that he would shut down trade talks with the nation if it went ahead. But that happened before Trump’s ability to enforce the tariffs was diminished.
Earlier this year, the Supreme Court rejected the Trump administration’s so-called “reciprocating” tariffs, ruling that the International Emergency Economic Powers Act does not give Trump the authority to impose unilateral tariffs. Although Trump has found a solution to impose a temporary 10% global tariff, it is not clear what tools he will have access to to impose this 100% tariff on multiple countries without any Congressional approval. However, historically, a lack of legal precedent has not stopped him from trying.
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