Donald Trump has warned of imposing a 100% tariff on countries that levy digital services taxes on US tech firms, but India is unlikely to be affected after scrapping its Equalisation Levy.
Trump Threatens 100% Tariff on Countries With Digital Services Tax Will India Be Affected (Source: X)
US President Donald Trump has announced that any country imposing a digital services tax (DST) on American companies could face a 100% tariff on goods exported to the United States. He also warned that such tariffs would override any existing or future trade agreements with those countries. The announcement has renewed concerns over global trade tensions, particularly between the US and countries that tax large American technology firms.
Trump Warns of 100% Tariffs
In a post on his Truth Social platform on Friday, Trump made his position clear against digital services taxes imposed on US technology companies.
He wrote, “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 further warned that trade agreements would not protect countries from the proposed tariffs.
The Trump administration has consistently argued that digital services taxes unfairly target American technology giants such as Alphabet Inc. and Meta Platforms Inc.
Will India Be Affected?
Most likely, India will not be affected by Trump’s latest tariff warning. India has already withdrawn both components of its Equalisation Levy, widely referred to as the Google Tax, which mainly applied to foreign digital companies, including US-based technology firms.
The Equalisation Levy was first introduced in 2016. It imposed a 6% tax on payments made to non-resident digital companies for providing online advertising services in India. The levy allowed India to tax revenue earned by overseas technology companies even if they did not have a physical presence in the country.
Last year, the government abolished the levy on digital advertising services provided by foreign technology companies through changes introduced in the Finance Bill, 2025. The repeal came into effect on April 1, 2025.
At the time, government officials told HT that removing the tax was partly aimed at easing trade tensions between India and the United States. India had already abolished the separate 2% Equalisation Levy on non-resident e-commerce operators through the Finance Act, 2024.
Which Countries Could Be Most Affected?
Trump’s latest announcement is expected to have the biggest impact on countries in the European Union (EU). The warning came just one day after EU member states approved a trade agreement negotiated with the United States last year. Under that deal, tariffs on European imports are capped at 15%.
However, digital services taxes were excluded from the agreement and continue to be one of the biggest unresolved issues between Washington and Brussels.
Since many of the world’s largest technology companies are headquartered in the United States, Trump argues that digital services taxes unfairly discriminate against American businesses and create barriers to US exports.
France Already Faces Similar Warning
Earlier this month, Trump warned that he would impose a 100% tariff on French wine and champagne unless France withdrew its digital services tax. France introduced a 3% digital services tax in 2019 on revenue earned within the country by major technology companies, including US firms such as Facebook, Amazon, Apple and Alphabet, Google’s parent company.
EU Responds to Trump’s Threat
The European Union reacted quickly to Trump’s latest statement. According to AFP, a spokesperson for the European Commission said the bloc would respond swiftly and decisively to defend its rights and regulatory autonomy.
For several years, the Office of the US Trade Representative has warned France, the United Kingdom, Austria, Spain and several other European countries that they could face retaliatory tariffs if they continue imposing digital services taxes on American technology companies.
The latest warning from Trump is expected to further intensify trade discussions between the United States and countries that continue to levy digital taxes on large US-based tech firms.
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