Signing an agreement is useless? Trump: If Europe dares to impose a digital tax, a 100% tariff will be added.

Trump issues a tough warning to European countries: anyone who dares to impose a digital services tax on American companies will immediately face a 100% import tariff. According to the latest report from Xinhua News Agency, on the 26th, U.S. President Trump posted on social media threatening to impose a 100% retaliatory tariff on European countries that levy a digital services tax on American companies. Trump stated that if the relevant digital services tax goes into effect, retaliatory tariffs will be implemented immediately, though he did not mention the legal basis for this action. Trump said that this tariff will take precedence over any trade agreement between the United States and the relevant countries—“whether already implemented, signed, or yet to be signed.” In other words, even if both sides have already reached a trade agreement, the agreement will be voided as soon as the other party levies a digital tax. He wrote in the post: “Please treat this statement as official notice—any country imposing such taxes will immediately face a 100% tariff on all goods exported to the U.S.” He also claimed that “multiple” European countries are discussing the “soon to be implemented” digital services tax targeting American companies, and some countries are “close” to putting it into practice. EU: We Will Not Back Down The EU’s response is equally tough. A spokesperson for the European Commission stated: “There is no justification for unilateral measures against such legitimate policies. If the U.S. insists on moving forward, the EU will swiftly and decisively defend its rights and regulatory autonomy.” The European Parliament has recently supported the implementation of a unified EU-level digital services tax, but the proposal requires unanimous consent from all 27 member states. According to the UK’s Financial Times, that likelihood is extremely low. Legal Tools: From Emergency Powers to Section 301 There is a key legal background behind this threat. Earlier this year, the U.S. Supreme Court ruled that some tariffs imposed by Trump citing emergency economic powers were unconstitutional, forcing the White House to seek other legal avenues. This time, White House officials say they will cite Section 301 of the Trade Act of 1974, which authorizes the President to take retaliatory measures after an investigation finds that a certain tax constitutes discriminatory or restrictive trade behavior. Trump used this clause to impose large-scale tariffs on Chinese goods during his first term. A Long-Standing Digital Tax Dispute The digital services tax controversy is nothing new. Countries like the UK and France have successively introduced digital taxes targeting large tech companies in recent years, reasoning that these companies earn large revenues in their countries but pay little tax. The U.S. has consistently argued that such taxes specifically target American companies and constitute discrimination. The UK’s digital services tax rate is 2%, levied on revenues of large tech companies. Back in April, Trump threatened to impose “high tariffs” if the UK does not abolish this tax. Canada’s earlier approach offers a reference: in June last year, Canadian Prime Minister Mark Carney announced the abolition of a digital services tax that targeted companies such as Amazon, Meta, and Netflix, in exchange for smoother trade relations with Washington. OECD Secretary-General Mathias Cormann, in an interview with the UK’s Financial Times earlier this month, urged countries to coordinate their positions and avoid acting independently. He said the fragmented approach to taxation “is bad for business, bad for trade and investment, and bad for growth.” Risk Warning and Disclaimer The market has risks, and investments should be approached cautiously. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investment is at your own risk.