A hard-fought trade truce between the European Union and the United States, ratified last week, may already be in peril ahead of a July 4 deadline.
President Donald Trump has threatened to hit the 27-member trade bloc with devastating duties over its Digital Services Tax (DST)—a key point of contention in the trade relationship.
“Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. Some of these Countries are close to actually doing this. Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% TARIFF on any and all Goods sent to the United States of America,” Trump wrote on Truth Social on Friday.
“This TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not. Additionally, the 100% TARIFF will be immediately imposed, if they proceed,” he added.
The president has repeatedly indicated that he would retaliate against nations that enact DSTs, which he believes undermine U.S. tech titans like Meta, Amazon and Alphabet, Google’s parent company. Trump lobbed similar threats at Canada in 2025, saying he would halt trade talks with the country unless it jettisoned its DST effort—and it did.
He also threatened the United Kingdom—which brokered a bilateral trade deal with the U.S. last year—with harsh duties in April if it failed to roll back a 2 percent duty on social media platforms, search engines, online marketplaces and other online apps. Outgoing U.K. Prime Minister Keir Starmer refused.
The EU responded swiftly to Trump’s threat, which was issued one day after the European Council ratified the Turnberry Agreement, which caps U.S. tariffs on European goods at 15 percent and draws down duties on American imports into the European market, eliminating most of them entirely.
“If pursued, the EU will respond swiftly and decisively to defend its rights and regulatory autonomy,” a European Commission spokesperson said.
