Because it worked so well the first time, Donald Trump is once again threatening to impose a 100% tariff—this time on any country that dares implement a digital services tax on American companies, renewing a previous threat that he first made last year but never actually acted on.
“Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. Some of these Countries are close to actually doing this,” Trump wrote on Truth Social. “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. 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.”
Digital services taxes (DST) are typically taxes that countries impose on gross revenues of companies operating within their jurisdiction, and have been used specifically to target American Big Tech firms like Google, Apple, and Amazon that do business globally but don’t pay significant taxes in all regions. Nations like France, Italy, Spain, and the United Kingdom have all imposed versions of DST to recoup some of the money that these tech giants have generated by doing business within their borders.
The Trump administration has taken issue with these taxes because, in its view, it unfairly targets American companies. They are also almost certainly trying to protect these firms after the companies poured money into Trump’s presidential campaign and inauguration fund, and continue to cozy up to the president despite his repeatedly putting them through public humiliation rituals.
Trump has successfully wielded the threat of economic penalties to kill off DST efforts before. Canada’s government backed off a proposal to implement a DST after Trump warned that he’d cut off trade talks with the nation if it moved forward. But that happened before Trump’s ability to enact tariffs got curtailed.
Earlier this year, the Supreme Court struck down the Trump administration’s so-called “reciprocal” tariffs, ruling that the International Emergency Economic Powers Act did not grant Trump the authority to unilaterally impose tariffs. While Trump did find a workaround to impose a temporary 10% global tariff, it’s unclear which tool he’d be able to reach for to enact this supposed 100% tariff on multiple nations without any congressional approval. Historically, a lack of legal precedent has not stopped him from trying, though.
