Signing an agreement is useless? Trump: If Europe dares to impose a digital tax, I'll add a 100% tariff.

Trump issues tough warning to European countries: Anyone who imposes a digital services tax on American companies will immediately face 100% import tariffs.

According to the latest Xinhua report, U.S. President Trump posted on social media on the 26th, threatening to impose 100% retaliatory tariffs on European countries that levy digital services taxes on American companies. Trump stated that if the relevant digital services tax is implemented, retaliatory tariffs will be enforced immediately, but he did not mention the legal basis for this move.

Trump said the tariffs would override any trade agreements between the U.S. and the countries involved, "whether already implemented, signed, or not yet signed." In other words, even if both sides have already reached a trade agreement, the agreement will be invalidated as soon as the other party imposes a digital tax.

In his post, he wrote: "Please take this statement as formal notice—any country that imposes such a tax will immediately face 100% tariffs on all its goods exported to the U.S."

He also claimed that "multiple" European countries are discussing "imminent" digital services taxes targeting American companies, and some have already "come close" to putting them into practice.

EU: We will not back down

The EU's response was equally tough.

An EU Commission spokesperson stated: "Unilateral measures against such legitimate policies are completely unfounded. If the U.S. insists on moving forward, the EU will quickly and decisively defend its rights and regulatory autonomy."

The European Parliament recently supported the introduction of a unified EU-level digital services tax, but this proposal requires unanimous approval from all 27 member states. According to the UK's Financial Times, this is highly unlikely.

Legal tools: From emergency powers to Section 301

Behind this threat lies a key legal background.

Earlier this year, the U.S. Supreme Court ruled that some of the tariffs Trump imposed under emergency economic powers were unconstitutional, forcing the White House to seek other legal avenues.

This time, White House officials said they would invoke Section 301 of the Trade Act of 1974, which authorizes the president to take retaliatory measures after an investigation determines that a tax constitutes discriminatory or trade-restrictive behavior. Trump used this very provision during his first term to impose large-scale tariffs on Chinese goods.

The digital tax dispute has a long history

The controversy over digital services tax is nothing new. The UK, France, and other countries have introduced digital taxes targeting large tech companies in recent years, on the grounds that these companies earn significant revenue in their countries while paying very little tax. The U.S. has consistently argued that these taxes specifically target American companies and constitute discrimination.

The UK's digital services tax rate is 2%, levied on the revenue of large tech companies. Trump threatened in April that if the UK does not scrap the tax, he would impose "high tariffs."

Canada's previous approach provides a reference: Last June, Canadian Prime Minister Mark Carney announced the repeal of a digital services tax targeting companies like Amazon, Meta, and Netflix in exchange for smoother trade relations with Washington.

OECD Secretary-General Mathias Cormann called for countries to coordinate positions and avoid going it alone in an interview with the UK's Financial Times earlier this month. He said a fragmented tax approach "is bad for business, bad for trade and investment, and bad for growth."

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