Trump to Impose Tariffs on Countries with Digital Service Taxes Targeting US Tech Giants

President Donald Trump has announced his intention to sign a memorandum authorizing tariffs on countries that impose digital service taxes on American technology companies.

A White House official detailed the order, stating that Trump is directing the administration to consider retaliatory measures, including tariffs, to address "digital service taxes (DSTs), fines, practices, and policies that foreign governments levy on American companies."

"President Trump will not allow foreign governments to expropriate America's tax base for their own advantage," the official emphasized.

The memorandum instructs the Office of the U.S. Trade Representative (USTR) to resume investigations into digital service taxes initiated during Trump's first term and to examine any additional countries that use such taxes "to discriminate against U.S. companies."

Trump confirmed his plans to reporters at the White House, stating, "We are going to be doing that, digital. What they're doing to us in other countries is terrible with digital, so we're going to be announcing that, maybe today."

Last week, Trump declared his intention to impose tariffs on Canada and France due to their digital services taxes. A White House fact sheet asserted that "only America should be allowed to tax American firms." It estimated that Canada and France each collected over $500 million annually from U.S. companies through these taxes.

"Overall, these non-reciprocal taxes cost America's firms over $2 billion per year. Reciprocal tariffs will restore fairness and prosperity to the distorted international trade system and prevent Americans from being exploited," the fact sheet declared.

Digital service taxes have been a source of trade disputes for years, targeting American tech giants such as Google, Facebook, Apple, and Amazon. Several countries, including the UK, France, Italy, Spain, Turkey, India, Austria, and Canada, have implemented these taxes on revenues generated from digital services sold within their borders.

During Trump's first term, the USTR determined through investigations that these taxes discriminated against U.S. companies and prepared retaliatory tariffs. President Joe Biden's trade chief, Katherine Tai, continued these investigations in 2021 and announced 25% tariffs on over $2 billion worth of imports from six countries. However, the tariffs were suspended to allow negotiations on a global tax deal to proceed.

These negotiations resulted in a 15% global corporate minimum tax, which the U.S. Congress has not ratified. Discussions on an alternative to digital taxes have stalled, and Trump withdrew the U.S. from the global tax arrangement during his initial days in office.

Trump's new order could lead to the reactivation of the USTR's retaliatory tariffs. These tariffs were previously designed to offset the amount of digital service taxes collected. In 2021, the USTR indicated its intention to impose tariffs on British goods worth approximately $887 million, Italian goods worth $386 million, and goods from other countries, including Spain, Turkey, India, and Austria, totaling $504 million.