Trump Eyes Tariffs to Counter Digital Taxes Big Tech Loathes

President Donald Trump announced plans to sign a memorandum on Friday aimed at countering digital services taxes imposed by some countries on US tech giants. This move could escalate a global conflict over addressing trade imbalances. The memo will instruct the Office of the US Trade Representative to propose retaliatory measures, including tariffs, on countries that impose digital taxes on US tech companies such as Alphabet Inc. and Meta Platforms Inc.

Trump emphasized the unfairness of these taxes, stating, “What they’re doing to us in other countries is terrible with digital. So we’ll be announcing that.” The memo, which focuses on digital trade issues, does not set a timeline for when tariffs might be implemented.

This issue has been a concern for Trump since his first term in the White House. In 2019, the USTR initiated probes into the tax systems of France, Italy, Spain, India, and other countries, concluding that the taxes were discriminatory and disproportionately affected American firms.

While some nations have withdrawn their digital services tax plans and joined global negotiations for a minimum tax on tech companies, those talks have repeatedly stalled. According to the Computer and Communications Industry Association, around 30 countries have adopted or proposed digital services taxes, including major US trading partners like the UK and Canada.

Trump’s action comes ahead of a visit from French President Emmanuel Macron, whose country has a digital tax affecting major US tech multinationals. France was one of the first countries to implement a digital services tax, but negotiations for its withdrawal never concluded.

US retaliation over digital taxes threatens to further strain relations with France and other European countries already at odds with Washington over Trump’s approach to ending the war in Ukraine. Trump and his allies have criticized what they see as unfair practices from Europe over trade, taxation, and efforts to counter misinformation on social media targeting US tech companies.

Trump’s plans highlight his broader strategy in his second term to use tariffs to reshape global trade ties and encourage companies to move production to the US. He has already imposed a 10% tax on imports from China, ordered and then paused 25% tariffs on goods from Canada and Mexico, and unveiled plans for a 25% levy on US imports of steel and aluminum. He has also directed his administration to propose reciprocal tariffs for each trading partner.

Trump’s second term has seen Silicon Valley executives seeking to influence the new president, with prominent CEOs of major tech companies visiting him at his Mar-a-Lago estate during the transition and attending his inauguration. While Trump has vowed to target policies abroad that harm these giants, many of his moves, such as fresh tariffs, threaten to squeeze tech companies that rely on global supply chains.