Trump threatens 100% tariffs on Europe over digital services tax

US President Donald Trump on Friday threatened a 100% tariff on imports from any country that imposes a digital services tax on US companies. In a social media post, Trump took aim at European countries, which he said are discussing an "imminent" implementation of such taxes on American companies.

The move could lead to a broader showdown, potentially raising prices and hindering economic growth, and possibly triggering a trade war if the 27-member European Union retaliates. Olof Gill, a spokesperson for the European Commission, said Friday that "unilateral measures targeting such legitimate policies are unjustified" and that the EU will respond "swiftly and decisively" to defend its rights and regulatory autonomy. Gill defended the tax on tech companies as "non-discriminatory" and applied equally to all large firms regardless of origin.

Trump has repeatedly pushed back against foreign efforts to tax or regulate US tech giants. Last year, he threatened new tariffs on any country moving to do so. The threat comes ahead of Trump's July 4 deadline for the EU and US to implement a tariff deal capping most EU exports at 15%.

Britain, no longer part of the EU, has since 2020 levied a 2% digital services tax on revenues of search engines, social media sites, and online marketplaces that derive value from UK users. The British government said at the time that corporate tax rules for digital businesses had led to a misalignment between where profits are taxed and where value is created.

The US government has previously conducted tariff investigations into digital services taxes under Section 301 of the Trade Act of 1974. It remains unclear how Trump would carry out his threat and whether he would apply tariffs broadly or initially target specific nations.