The European Union isn’t blinking. After President Donald Trump threatened to slap 100% tariffs on imports from any country that taxes US digital services companies, the EU responded with what amounts to a diplomatic shrug and a clenched fist.
European Commission spokespeople reaffirmed the bloc’s “sovereign right” to regulate tech companies operating within its borders, vowing to defend its laws “decisively” against external pressure.
The tariff threat and the trade deal gap
Trump’s threat, issued on June 26, is not subtle. A 100% tariff on goods from countries imposing digital services taxes would essentially double the cost of European exports to the US, making everything from German cars to French wine prohibitively expensive for American consumers.
The US and EU struck a trade framework deal just last month. That May 2026 agreement capped most tariffs on EU exports at 15%. But digital taxes were explicitly carved out of that deal.
