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In a nutshell: A dispute over how to tax digital businesses is spilling into trade policy, with the US now threatening 100% tariffs on countries that unfairly charge companies in the digital sector. The implications of such a trade war would hit far more than the tech sector.

Several European countries have been considering or already applying digital services taxes to large online platforms. These surcharges are aimed at revenue generated by activities such as digital advertising and online marketplaces – areas dominated by US-based companies.

On Friday, President Donald Trump responded with a stark warning.