Digital Tax Tussle Opens New Trump-Europe Battlefront

President Donald Trump’s threat to impose a 100% tariff on all imports from countries that levy digital services taxes on US companies has thrust the European Union in another potential long-drawn out tussle against Washington.

Trump has escalated simmering tensions with the 27-member EU with the fresh tirade over taxation of US technology firms. The US administration has been fiercely critical of EU and its NATO allies over what it termed as lack of support for the Middle East conflict. After signing a ceasefire in the Middle East conflict, Trump has opened a new battlefront as he picks on the EU nations over the digital tax.

“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,” the US President said in a post in Truth Social on Friday.

Trump also said the proposed tariff “will supersede Trade Deals made with the Country, whether implemented, signed, or not.”

Responding to Trump’s tariff threat, the European Commission on Friday retorted that the EU ‌and its member states have the sovereign ​right to ​regulate economic activity.

The bloc has vowed to respond ​swiftly ​to ⁠unilateral measures, though it said it was ​open to find a ​global ⁠solution in accordance with G7 agreements.

Olof Gill, a spokesperson for the European Commission, has said the taxation applied equally to “all large companies, regardless of their origin.” The taxes are non-discriminatory by design, he said.

The Trump administration has viewed the digital tax as discriminatory against US tech companies. The tax is”designed to harm, or discriminate against, American Technology,” he said last year.

The European Union had finalized a trade deal with the US, capping most tariffs on EU exports at 15%. The deal followed protracted discussions within the bloc after a tentative agreement was reached, is now under threat.

Digital taxes were not part of the EU-US pact and remains a sticking point between the U.S. and the European bloc.

The latest Trump threat also comes ahead of a July 4 deadline set by the US and the European Union to implement the trade deal. |

Britain, which is not an EU member nation, has a 2% digital services tax on revenues earned by search engines, social media sites and online marketplaces that “derive value” from UK users since since 2020.

The digital services tax applies to US tech companies such as Apple, Google and Amazon, and raised more than £800m in 2024-2025, UK Treasury data showed.

In the event of the Trump administration following up on his threat against digital tax by slapping tariffs, the EU may be forced to take retaliatory steps.

This could trigger a larger trade war between the US and EU, The Guardian reported.

It is not clear how the US administration intends to follow up on the threat as the US Supreme Court had quashed retaliatory tariffs in February this year.

The EU-US bilateral trade accounts for nearly 30% of global goods and services trade, and 43%of global GDP. Trade between the 27-member bloc and the US has doubled over the decade, crossing $1.9 trillion last year, according to reports.