US President Donald Trump has threatened to impose a 100% tariff on imports from European Union countries that maintain digital services taxes on American companies.
The warning, issued via a post on Truth Social on Friday, explicitly stated that such tariffs would supersede any existing trade agreements, whether signed or implemented.
The threat targets the digital services tax (DST) levied by several EU member states, including France and Germany, which have long been a point of contention in transatlantic trade relations.
The tax is designed to ensure that large digital companies pay their fair share of taxes in countries where they generate significant revenue, even without a physical presence.
Markets are likely to react with increased volatility, particularly for US tech giants such as Alphabet (GOOGL.O) and Amazon (AMZN.O), which are heavily exposed to European markets.
The potential for a trade war could lead to higher costs for consumers and businesses, as well as disruptions in global supply chains.