Trump Threatens 100% Tariffs on the EU Over Digital Service Tax

Another trade war looms over European implementations of a DST.

Truth Social: Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. Some of these Countries are close to actually doing this. Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% TARIFF on any and all Goods sent to the United States of America. This TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not. Additionally, the 100% TARIFF will be immediately imposed, if they proceed. Thank you for your attention to this matter. President DONALD J. TRUMP
Jun 26, 2026, 10:20 AM

The Digital Services Tax (DST)

• What it is: A tax on the gross revenues that large multinational tech companies generate from providing digital services (such as online advertising, digital marketplaces, and user data transmission) in countries where they may lack a physical presence.
• Who pays it: It largely targets dominant U.S. technology conglomerates.
• Where it applies: There is no EU-wide tax. Instead, individual nations like France, Italy, Spain, and Hungary have enacted their own unique DSTs.
• Controversy: These unilateral taxes are a major source of international trade tension, with the U.S. threatening retaliatory tariffs on European goods.

Trump Howls at the EU

The AP reports Trump threatens 100% tax on European imports if countries impose tax on digital services

President Donald Trump on Friday threatened a 100% tax on imports from any country that imposes a tax on digital services from United States companies.

The move could lead to a larger showdown that could increase prices and hinder economic growth, possibly setting off a larger trade war if the 27-member European Union was compelled to retaliate.

“Unilateral measures targeting such legitimate policies are unjustified. If pursued, the EU will respond swiftly and decisively to defend its rights and regulatory autonomy,” said Olof Gill, a spokesperson for the European Commission on Friday.

He defended taxation on technology companies as “non-discriminatory” and applied equally to “all large companies, regardless of their origin.”

The threat comes ahead of Trump’s July 4 deadline for the European Union and the United States to start implementing a tariff deal that caps tariffs on most EU exports at 15%.

The European Union in May finalized a trade deal with the United States that caps most tariffs on EU exports at 15%. The deal followed months of debate within the EU after European Commission chief Ursula von der Leyen tentatively struck the deal last year while visiting Trump’s golf course in Scotland.

Digital taxes were not part of the agreement and have remained a sticking point between the U.S. and the European bloc.

Britain, which is no longer part of the EU, has since 2020 levied a 2% digital services tax on revenues earned by search engines, social media sites and online marketplaces that “derive value” from U.K. users.

The British government said in a policy document at the time that corporate tax rules for digital businesses had “led to a misalignment between the place where profits are taxed and the place where value is created.”

The U.K. tax includes thresholds, so mainly large international companies will pay it. The tax was designed to “ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services,” the document said.

100 Percent Tariffs? How?

The Supreme Court wisely struck Trump’s reciprocal tariffs.

Then a trade court struck Trump’s Section 222 replacement tariffs.

On February 20, 2026, I commented Supreme Court Strikes Trump’s Reciprocal Tariffs In 6-3 Vote (I Told You So)

Forgive me for bragging, but I got every justice correct.

On May 7, I commented Trade Court Sends Trump’s Section 122 Tariffs Down the Drain

Gee, I get another Tariff “I Told You So.”

Rule of Law 2, Trump’s Tariffs 0

In a foolish effort to get around reciprocal tariffs, Trump turned to Section 122 tariffs. As expected in this corner, the court struck those down too.

My expectation on any appeal is the same. The case on merits is clear.

Current Status of Section 222 Tariffs

• The administration appealed immediately to the U.S. Court of Appeals for the Federal Circuit (CAFC). skadden.com
• The Federal Circuit has issued administrative stays (extended as recently as mid-June), so the tariffs remain in effect and are still being collected for nearly all importers while the appeal plays out. reuters.com
• The Section 122 tariffs are scheduled to expire automatically on July 24, 2026 (150 days from their Feb. 24 effective date) unless Congress extends them — which is considered highly unlikely. skadden.com

Expect More Refunds

Trump should and will lose the case if appealed.

All Trump has is Section 301 tariffs and they are not so easy to implement.

Key Requirements for Imposing Section 301 Tariffs

• Investigation Initiation: USTR can self-initiate after consulting stakeholders or respond to a petition from an interested party (e.g., firm or industry group). USTR decides on petitions within 45 days. congress.gov
• Consultations and Investigation: USTR requests consultations with the foreign government. For trade agreement violations, formal dispute settlement is required. Investigations generally last up to 12 months for discretionary cases (unreasonable/discriminatory practices). Mandatory cases (e.g., trade agreement violations or “unjustifiable” acts) have stricter timelines. congress.gov
• Public Input: USTR must seek public comments on proposed actions and often holds hearings. This builds an administrative record. brookings.edu
• Determination: USTR must find that the foreign practices burden/restrict U.S. commerce. Actions are mandatory for certain violations (e.g., trade agreement denials or unjustifiable acts) and discretionary for unreasonable/discriminatory ones. congress.gov
• Action Selection: Tariffs (duties) are prioritized over other import restrictions. The response should be equivalent in value to the harm caused. USTR can also suspend trade agreement concessions or negotiate binding agreements. law.cornell.edu

Potential Legal/Practical Issues

• Procedural requirements — Unlike unilateral proclamations, Section 301 requires: A formal investigation (or reopening one), public comments and hearings, and a determination that the foreign practice is “unreasonable or discriminatory” and burdens U.S. commerce.
• This takes time (months, not “immediately”).
• Section 301 has no statutory cap on rates, but actions must be proportionate to the harm. A blanket 100% tariff on all goods from a country would be an extreme escalation and vulnerable to legal challenge It would also need to follow the administrative process.
• Superseding trade deals — Possible under Section 301 (it can suspend concessions), but this risks WTO disputes, retaliation, and complications with allies. Europe has already finalized some trade elements with the U.S. recently.
• Political/diplomatic blowback — Many European countries (France, Italy, UK, etc.) already have DSTs targeting Big Tech revenue. A 100% threat could unify EU retaliation and strain relations at a sensitive time.
• Court precedent — After the Supreme Court limited IEEPA and the CIT struck down Section 122 (with appeal ongoing), aggressive unilateral tariffs are on shakier ground. Importers and foreign governments could challenge this quickly.

Rhetorical Noise

A full 100 percent blanket tariff response is nothing but rhetorical noise whether Trump understands that or not.

The EU and UK certainly understand the above sentence.

Meanwhile, the Section 122 150-day clock is winding down.

Trump is neutered on today’s over-the-top threat. However tariff damage is real and ongoing.

Ongoing and Upcoming Tariff Damage

Blanket tariffs on steel, aluminum, and other products are extremely damaging.

Trump can do still more damage with the USMCA deal coming up for review on July 1, 2026.

But Trump will never see the stupidity of it all. This year in the name of fighting inflation (that he claims is nonexistent), Trump has rolled back numerous tariffs.

Trump Tariff TACOs

• Agricultural and Mobile Industrial Equipment: Decreased tariffs on combines, harvesters, bulldozers, and forklifts to 15% from 25% for trade-deal countries.
• Metals: Lowered the duty rate to 10% for specific capital equipment imports from countries utilizing at least 85% U.S. melted/poured steel or aluminum.
• Food and Produce: Exempted key food imports from reciprocal tariff rates to lower grocery costs. Products benefiting from these reductions include coffee, tea, bananas, avocados, pineapples, tree nuts, and select beef cuts.

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