US President Donald Trump has once again reached for his favourite blunt instrument: tariffs. This time, the United States is threatening new levies and export restrictions on advanced technology and semiconductors in retaliation for digital services taxes imposed by other countries on American tech firms.
Posting on social media Monday, Trump thundered that these measures were “all designed to hurt or discriminate against American technology” while, outrage of outrages, giving “a complete free pass to the largest Chinese tech companies.”
“This must stop, and stop NOW!” he barked, without bothering to name which countries he was threatening. “If these discriminatory measures are not removed, as President of the United States, I will impose substantial additional tariffs on that country’s exports to the US and restrict exports of our highly protected technology and microchips.”
In other words, a new instalment of tariff roulette for America’s trading partners. Barely weeks after slapping country-specific duties across dozens of nations, Trump now promises more. Last week it was imported furniture, this week digital taxes, next week, perhaps umbrellas or garden gnomes.
Trump has long railed against digital services taxes, which target US tech behemoths such as Amazon, Google-owner Alphabet, and Facebook-parent Meta, as a plot to siphon money from America’s crown jewels. At the same time, Washington has increasingly restricted the export of advanced chips from Nvidia and others, because silicon is now national security incarnate.
The timing is awkward. Only days ago, the US and European Union signed a joint statement vowing to fight “unjustified” trade barriers and promising not to tax electronic transmissions. Yet Brussels, with its usual lawyerly precision, clarified it had never promised to rewrite its own Digital Services or Digital Markets Acts. Translation: Europe will happily keep using its digital rules as a bargaining chip in the following trade round, ideally to get tariff-free wine and whisky into American supermarkets.
Canada, sensing which way the wind blows, backed down at the last minute earlier this summer, scrapping a planned digital levy hours before it took effect after Trump froze trade talks and denounced the measure as “outrageous.” Others, including the UK, have held firm with their modest 2% levy on search engines, social media and online marketplaces.
Meanwhile, the OECD continues its Sisyphean effort to hammer out a global tax deal for digital profits, aiming to replace this patchwork of national measures. But any agreement that dilutes US taxing rights risks, of course, being torpedoed by Washington, because when it comes to taxes, America believes in sovereignty for itself and harmonisation for everyone else.
So the message is clear: foreign governments taxing US tech giants is “discrimination,” but Washington taxing global revenues is patriotic policy. The hypocrisy is hardly new, but Trump’s style makes it explicit: protectionism wrapped in populist outrage, enforced with tariffs, and justified as a crusade for “fairness.”
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