On the night of August 25, President Donald Trump announced an escalation in trade policy, threatening to introduce substantial new tariffs and restrict semiconductor exports to countries imposing digital taxes on U.S. technology companies.
In a post on Truth Social, Trump emphasized that nations with these taxes must remove what he termed discriminatory measures or face economic penalties. His warning primarily targets European nations like the United Kingdom, France, Italy, and Spain, where taxes on technology firms such as Meta, Google, and Amazon have been implemented.
“I am putting all countries with Digital Taxes, Legislation, Rules, or Regulations on notice: unless these biased measures are removed, I, as President of the United States, will impose large additional tariffs on that country’s exports to the U.S.,” Trump wrote Monday night.
He also suggested the possibility of “imposing export restrictions on our highly protected technology and chips,” highlighting the strategic importance of American semiconductor expertise in this conflict.
This announcement comes shortly after Meta CEO Mark Zuckerberg met privately with Trump at the White House to discuss the impact of digital services taxes on the company’s international operations. According to sources familiar with the meeting, Zuckerberg raised concerns about these taxes.
Digital services taxes often target revenue from users in a specific country, even if the company has minimal physical presence there. For example, the UK imposes a 2% tax on companies earning over $654 million globally and more than $32 million in UK revenue, primarily affecting large U.S. tech firms.
Trump has consistently argued that these taxes unfairly target American corporations while excluding Chinese tech companies. In his Truth Social post, he claimed these laws “shamelessly give a total pass to China’s largest tech companies.”
This latest warning marks a significant increase in Trump’s trade disputes, risking further tensions with long-standing allies. The European Union has already rejected his demands, with European Commission spokesperson Thomas Regnier stating that changing regulations like the Digital Markets Act and Digital Services Act was “not on the table” in recent trade discussions.
This move echoes Trump’s previous term. In June, he successfully pressured Canada to drop its planned digital services tax after threatening to halt trade negotiations. White House Press Secretary Karoline Leavitt later stated that Canadian Prime Minister Mark Carney had “caved” to Trump’s demands.
The threat to limit semiconductor exports is particularly concerning given the United States’ leadership in advanced chip production and design. Such actions could significantly affect countries reliant on U.S. technology in sectors like AI, 5G, and other critical industries.
Trump’s firm stance on digital taxes aligns with his broader “America First” policy, aimed at protecting U.S. tech companies from what he perceives as unfair foreign taxation. He has consistently characterized these taxes as direct challenges to American innovation and economic power.
His declaration comes as the Organization for Economic Cooperation and Development continues slow negotiations to establish a unified global tax framework. Trump’s threats indicate his reluctance to wait for an international agreement.
European leaders, on the other hand, have stressed that regulating tech giants is crucial to their pursuit of “digital sovereignty” and are unlikely to yield under U.S. pressure. This sets the stage for a potential conflict between Trump’s trade policies and Europe’s regulatory goals, with significant transatlantic trade at stake.
As Trump prepares to take action, the global technology sector faces the possibility of being drawn into a major international trade dispute, caught between U.S. protectionist measures and foreign governments’ intent to tax their operations.