Agreement won't help? Trump: If Europe dares to impose a digital tax, we will add 100% tariff.

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

According to the latest report from Xinhua News Agency, 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, the retaliatory tariffs will take effect immediately, but he did not mention the legal basis for this move.

Trump said the tariffs would override any trade agreement between the U.S. and the countries involved, "whether implemented, signed, or not yet signed." In other words, even if a trade deal has been reached between the two sides, the agreement would be voided immediately once the other party imposes a digital tax.

He wrote in the post: "Please consider this statement as formal notification—any country imposing such a tax will immediately face 100% tariffs on all goods exported to the U.S."

He also claimed that "several" European countries are discussing the "soon-to-be-implemented" digital services tax targeting American companies, with some countries "close" to putting it into practice.

EU: We will not back down

The EU's response was equally tough.

An EU Commission spokesperson said: "Unilateral measures against such legitimate policies have no basis. If the U.S. insists on moving forward, the EU will swiftly and decisively defend its rights and regulatory autonomy."

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

Legal tool: Shifting 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 tariffs imposed by Trump under emergency economic powers were unconstitutional, forcing the White House to seek other legal pathways.

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 same provision to impose large-scale tariffs on Chinese goods during his first term.

The digital tax dispute has a long history

The controversy over digital services taxes is nothing new. The UK, France, and other countries have introduced digital taxes targeting large tech companies in recent years, arguing that these firms generate substantial revenue in their countries but pay little tax. The U.S. has consistently maintained that such taxes specifically target U.S. companies and are discriminatory.

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 cancel the tax, he would impose "high tariffs" on the country.

Canada's previous handling 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, in an interview with the Financial Times earlier this month, called on countries to coordinate their positions to avoid going it alone. He said that a fragmented approach to taxation is "bad for business, bad for trade and investment, and bad for growth."

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