President Donald Trump on Friday threatened to impose a 100 per cent tariff on all goods imported from any country that enacts a digital services tax on American companies, a move that immediately escalates transatlantic trade tensions. The warning, posted on his Truth Social platform, singled out European nations that he said were discussing the “imminent” implementation of such levies. It came just one day after the European Union gave final approval to a bilateral trade deal capping most EU export tariffs at 15 per cent—an agreement that did not cover digital taxation.

Under the proposed measure, the punitive tariff would apply to every shipment from an offending country and would supersede any existing or future trade agreement, whether signed, implemented or still under negotiation. Washington has long argued that digital services taxes discriminate against US technology giants, and the administration has previously used Section 301 of the Trade Act of 1974 to investigate and retaliate against such measures. The threat is framed as an immediate consequence: “the 100% TARIFF will be immediately imposed, if they proceed,” Trump wrote.

Viewed from Brussels, the European Commission responded within hours, asserting that the EU and its member states have a sovereign right to regulate economic activity on their territory and that any digital tax would be non-discriminatory, applying equally to all large firms regardless of origin. A spokesman warned that unilateral US measures were “unjustified” and that the bloc would “respond swiftly and decisively” if tariffs were applied. France has maintained a 3 per cent levy on digital revenues since 2019, and President Emmanuel Macron recently stated he would not repeal it despite US pressure. The United Kingdom, outside the EU, applies a 2 per cent digital services tax on revenues derived from UK users, which raised over £800 million in 2024–25.

The threat lands ahead of a 4 July deadline for the EU and US to begin implementing their tariff deal, a milestone now clouded by the digital tax dispute. Canada withdrew its own digital services tax earlier this year under similar pressure from Washington, while India is unlikely to be affected after removing some levies in 2024 and 2025. The next factual marker is whether any European country proceeds with a new digital tax before the July deadline, potentially triggering the immediate tariff response Trump has outlined.