[Photo Credit: Reuters]
U.S. President Donald Trump threatened on Friday a 100% tariff on all goods from any country that imposes a digital services tax on American companies, inflaming transatlantic trade tensions a day after European Union countries met Trump’s July 4 deadline to cut tariffs on U.S. goods.
Trump said the new tariff would supersede any trade deals with the United States, “whether implemented, signed or not.”
That would include the deal the U.S. and EU agreed to last year, which caps U.S. tariffs on European goods at 15% in exchange for EU countries reducing tariffs on U.S. industrial goods to zero.
But a lengthy EU legislative process to meet the bloc’s commitments under the deal prompted Trump to threaten to reimpose a 25% tariff on imports from Europe, including autos. EU lawmakers then scrambled to meet a deadline from Trump to implement the changes by July 4.
French President Emmanuel Macron said last week, before meeting with Trump at a G7 summit, that France would not bow to pressure from him and scrap its digital tax on U.S. tech giants. The digital services it taxes include online marketplaces and advertising.
Before setting off for the summit in France, Trump had warned that the U.S. would “have no choice” but to apply 100% tariffs on French wine unless Paris eliminated its digital tax.
France has applied a 3% levy since 2019 on revenue earned in France from digital services provided by companies with revenue of more than €25 million in the country and €750 million ($854.02 million) worldwide. French lawmakers last year proposed doubling the tax to 6%.
The U.S. Trade Representative’s office has long threatened France, Britain, Austria, Spain and other European countries with retaliatory tariffs if they impose digital services taxes, arguing that these levies discriminate against U.S. companies, which dominate the sector globally.
