Trump threatens 100% tariffs over digital taxes
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- Donald Trump threatened a 100% tariff on all goods from any country imposing a digital services tax on American companies, posting the warning on social media Friday and singling out European countries 'close to actually doing this.'
- Trump stated the new tariff would supersede any trade deals with the United States 'whether implemented, signed or not,' effectively voiding existing agreements with countries that adopt a digital levy.
- French President Emmanuel Macron said hours before meeting Trump at the G7 summit that France would not bow to pressure to scrap its digital tax on US tech giants, drawing the warning just as the two leaders met in person.
- Trump had warned before traveling to the G7 that the US would 'have no choice' but to apply 100% tariffs specifically on French wine unless Paris eliminated its digital tax.
- France's digital levy has been in force since 2019, applying a 3% rate on digital services revenue from companies earning more than €25 million in France and €750 million worldwide.
Why it matters: France's 3% digital levy, in place since 2019, has long been a flashpoint, but Trump's latest threat escalates from sector-specific wine tariffs to a blanket trade penalty that overrides signed trade agreements. European capitals weighing their own digital taxes now face a direct economic deterrent — adopting even a modest levy on US tech giants could trigger 100% duties on all their exports to America.
