US President Donald Trump, on 26 June, warned that any new European digital services tax targeting American companies would trigger immediate 100% tariffs, complicating ongoing trade negotiations.
US President Donald Trump, on 26 June 2026, pledged to impose 100% tariffs on European countries that introduce new digital services taxes (DSTs) primarily targeting US-based companies.
However, he made no mention of how he would legally enforce such duties. He said DSTs would be met with the full tariff response “right away,” independent of existing trade relations.
“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.” Trump posted on Truth Social.
The announcement came as a jolt to EU and US negotiators who were preparing to wrap up a broad trade framework that the two sides had first agreed on in August 2025.
Hours before Trump’s post, the EU Council had formally adopted two regulations on 25 June implementing the commitments both sides had pledged in their August 2025 joint statement. Those regulations were intended to move the trade deal forward after both sides had signalled plans to cut tariffs on numerous goods. Trump did not specify whether the EU measures counted as “new” DSTs under his threat.
The August 2025 US-EU Framework Agreement aims to resolve trade imbalances and boost reindustrialisation. Key terms include the EU eliminating tariffs on US industrial goods and expanding market access for US agricultural products. Reciprocally, the US will apply a maximum 15% combined tariff on most EU goods, while subjecting items like aircraft and generic pharmaceuticals to only Most Favoured Nation rates.
The EU also commits to massive procurement, intending to purchase USD 750 billion in US energy products, USD 40 billion in AI chips, and increased military equipment by 2028. Furthermore, European companies are expected to invest USD 600 billion in US strategic sectors.
Both parties agree to reduce non-tariff barriers, mutually recognise automotive standards, address US concerns regarding EU sustainability regulations, and strengthen their economic and digital security alignment.
Trump has flagged DST retaliation before, most notably with Canada, to which they quickly responded by rescinding its DST retroactively, allowing affected companies to claim refunds with interest.
Since returning to office, Trump has signed multiple bilateral trade agreements that explicitly prohibit digital services taxes. Whether the EU will follow Canada’s path remains unclear, given that the bloc has been moving toward a coordinated taxation approach rather than abandoning it.
