US President Donald Trump has warned that any country imposing a Digital Services Tax on American companies will face 100 percent tariffs on all goods exported to the United States. He also threatened to cancel existing trade agreements with such nations, announcing the warning through a post on his Truth Social account. The Trump administration has consistently opposed such taxes, arguing that they unfairly target major American technology companies such as Alphabet (Google) and Meta (Facebook).
India is unlikely to be affected by this warning. The Indian government had introduced a 6 percent Equalisation Levy in 2016 on foreign companies earning advertising revenue in India without a local office. However, this tax was fully abolished from April 1, 2025, through the Finance Bill 2025, with the intention of preserving strong trade ties with the United States. A separate 2 percent tax on e-commerce companies had already been withdrawn in 2024, leaving India with no exposure to Trump’s current threat.
The warning is expected to hit European Union nations hardest. Under existing agreements, tariffs on European goods entering the US are capped below 15 percent, but the digital tax dispute has created serious friction between Washington and Europe. Trump recently threatened France specifically, warning of 100 percent tariffs on French wine and champagne if Paris did not withdraw its digital tax.
The EU fired back, stating it would respond swiftly and firmly to protect its rights. Countries including France, Britain, Austria, and Spain have long been in Washington’s crosshairs over their digital taxes on American firms. Since the world’s largest technology companies are all based in the US, Trump has argued that such taxes disproportionately harm American business interests.