Trump threatens Europe with a 100% tariff if it taxes tech companies

BarcelonaThe President of the United States, Donald Trump, is once again wielding trade policy to attack countries that go against his interests. The tycoon threatened the European Union this Friday with a 100% tariff on all products exported to the US from any country that applies a tax on digital services to American companies that operate there. In a post on his social network, Truth Social, Trump stated that "there are already some European countries that are close" to implementing such a tax, and he hopes to dissuade them with a new trade barrier.

Trump's threat, furthermore, puts the troubled trade agreement between the EU and the United States, ratified this very June, in the spotlight, which maintains a general tariff of 15% on a large part of European articles arriving in the North American country. According to the president, the new tariff "would nullify any trade agreement with the country, whether it is implemented or signed or not".

The transatlantic understanding, it should be recalled, has reached a good port after having been postponed up to three times, in the face of the American leader's multiple outbursts. Among other instances, MEPs froze the initiative after Trump threatened to invade Greenland.

The EU, "sovereign"

The reaction of the European authorities to Trump's threat has not been long in coming. Shortly after Trump's publication on his social network, the spokesman for the European Commission, Olof Gill, has claimed the "sovereignty" of the Union and all member states to "regulate economic activities in their territory in line with the democratic values" they defend.

Far from targeting American tech companies, Gill assured that digital taxes, where they apply, tax "all companies equally, regardless of their origin." In this regard, the spokesman considers the White House's potential reprisals against "legitimate policies" such as the digital tax to be "unjustified." Should they come into effect, the Community executive has pledged to "respond swiftly and decisively to defend regulatory autonomy."

Regarding the tax, Gill has advocated for a "global solution" to taxes on the digital economy. "It is our preferred path, and we are prepared to take it constructively," concluded the spokesman.

France, Spain and the United Kingdom

Several European countries apply a tax similar to the one Trump has denounced. Spain approved the tax on certain digital services in 2020, known as the Google tax. So did the United Kingdom, which taxes the income of technology companies that invoice above certain levels in the country by 2%; as well as France, which activated the rate even earlier, in 2019.

The objective of this tax is to circumvent the strategies of digital giants to avoid paying taxes, such as locating their headquarters in countries with more lenient tax systems and paying them all there.

The new threat comes a few days after the clash between Trump and the French president, Emmanuel Macron. Before the G7 meeting in Geneva, the American leader threatened Macron with a 100% tariff on French wines if he did not eliminate the tax.

French wine and spirits have been one of the White House's favorite targets since the beginning of Trump's second term, with multiple threats on one of the flagship exports of the French economy. Faced with the American offensive, however, Macron denied any intention of eliminating the digital tax.