Former President Donald Trump has issued renewed threats of imposing significant tariffs on countries that implement digital services taxes (DSTs) targeting U.S. technology firms. This directive, issued on February 21, orders the U.S. Trade Representative (USTR) to revive investigations into these taxes, which are seen as discriminatory against American companies like Google, Meta, Apple, and Amazon. Trump's administration previously launched Section 301 investigations during his first term, which laid the groundwork for potential retaliatory tariffs.
Specific threats have been made against France and the United Kingdom. Trump warned France that if it does not eliminate its 3% digital services tax, he would impose a 100% tariff on all French wines and champagnes. This GAFAM tax, which also applies to Google, Amazon, Meta, and Apple, generated approximately $700 million for France last year. Similarly, Trump cautioned the UK, stating that if it doesn't drop its 2% DST, which raised around £800 million ($1.08 billion) in the 2024-2025 financial year, the U.S. would impose a "big tariff" on the country.
The USTR previously launched investigations into DSTs from countries including Britain, France, Italy, Spain, Turkey, India, Austria, and Canada. While President Biden's administration in 2021 suspended tariffs on over $2 billion worth of imports from six countries to facilitate global tax negotiations, Trump has since effectively withdrawn the U.S. from the global tax arrangement. He explicitly stated that the 15% global minimum tax has "no force or effect in the United States" and mandated the U.S. Treasury to explore "protective measures." The white paper from his administration noted that France and Canada alone collected over $500 million annually in DST revenues, with global levies surpassing $2 billion.
Trump's renewed focus on DSTs also extends to scrutinizing how U.S. firms are treated under the EU's Digital Markets Act and Digital Services Act, viewing such measures as undermining free speech or fostering censorship. His administration is committed to defending American workers and businesses against what it considers "extortion" by foreign governments. While Canada reportedly shelved its digital tax in 2025 after U.S. pressure, and Italy has considered repealing its levy, the UK has maintained its DST under its current trade agreements with the United States.
