Overview
- President Donald Trump posted a Truth Social warning on Friday that any country that enacts a digital services tax will be “immediately” hit with a 100% tariff on all goods sent to the United States.
- The European Commission said it will defend its regulatory autonomy and vowed to respond swiftly and decisively if the United States pursues unilateral tariffs against EU member states.
- Legal experts and multiple outlets say it is unclear how the administration would lawfully impose a universal 100% tariff given recent Supreme Court limits on broad reciprocal-tariff powers and statutory time limits on some trade authorities.
- The threat comes just ahead of a July 4 timetable tied to a U.S.-EU deal that would cap most EU exports to the United States at 15%, with digital services taxes explicitly excluded from that pact and remaining a key flashpoint.
- Digital services taxes are designed to tax revenue local tech platforms generate without a big physical presence and already exist in places such as France (3% since 2019) and the UK (2% since 2020), and past U.S. pressure prompted Canada to drop a proposed levy.