Mr. Trump threatened to impose 100% import tax on many countries

On June 26, US President Donald Trump wrote on the social network Truth Social: “Many European countries are discussing applying a digital services tax to US companies. Some are very close to implementation.”

Therefore, he declared that “any country that imposes such a tax will immediately face a 100% tax on all goods exported to the US”. The new tariffs will replace all trade agreements with the US, “regardless of whether they have been implemented, signed or not”.

This includes the agreement that the US and European Union (EU) reached last year. This agreement sets a ceiling on US import tariffs on European goods of 15%. In return, EU countries brought import tariffs on US industrial goods to 0%.

Mr. Trump has previously announced many times to respond to countries that impose digital services taxes because he believes that this tax unfairly targets US technology giants. Last June, he ended trade negotiations with Canada because the country planned to apply a similar tax. Then, Ottawa canceled this tax right before its expected effective date.

The Office of the US Trade Representative (USTR) has also threatened to retaliate against France, the UK, Austria, Spain and many European countries if they apply digital services taxes.

Digital services taxes are often designed to apply to technology giants such as Meta, Alphabet or Amazon. These are all American businesses.

More than 10 countries around the world have applied this tax. However, in his June 26 post, Mr. Trump only mentioned “many European countries” that he said were considering imposing tariffs.

Before meeting with Mr. Trump on the sidelines of the G7 summit last week, French President Emmanuel Macron announced that he would not bow to pressure from the US and would not cancel the digital services tax. Taxable services include e-commerce platforms and online advertising activities.

Before leaving for the summit in France, Mr. Trump warned that the US “will have no choice” but to impose a 100% tax on French wine, if Paris does not abolish the digital services tax. From 2019, France imposes a 3% tax on digital services arising domestically. The decree targets companies with global revenues of over 750 million euros ($854 million), of which at least 25 million euros are from the French market. Last year, this country’s parliamentarians also proposed to double the tax rate (6%).

It is unclear what law Mr. Trump will rely on to immediately impose such high tariffs on each country. In February, the US Supreme Court rejected the tariffs that Mr. Trump applied based on the International Emergency Economic Powers Act (IEEPA). The justices said the law does not allow the Trump administration to unilaterally impose tariffs globally.