Trump vows export curbs, tariffs in digital tax reprisal

WASHINGTON – US President Donald Trump threatened to impose fresh tariffs and export restrictions on advanced technology and semiconductors in retaliation against other nations’ digital services taxes that hit American technology companies.

Mr Trump posted on social media on Aug 25 that the measures “are all designed to harm, or discriminate against, American Technology” and “outrageously, give a complete pass to China’s largest Tech Companies”.

“This must end, and end NOW!” Mr Trump posted. “Unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A., and institute Export restrictions on our Highly Protected Technology and Chips.”

The President’s latest act of trade brinkmanship again raises uncertainty over tariff rates for US trading partners.

Soon after

Mr Trump set country-based levies

with dozens of partners earlier in August, he vowed to impose new charges on a range of imports.

Last week, he said imported furniture would be subject to new duties.

Mr Trump has long argued that digital services taxes discriminate against US tech giants such as Amazon.com, Google owner Alphabet and Facebook parent Meta Platforms.

The US has increasingly used export restrictions on technologies – including advanced chips from firms including Nvidia for artificial intelligence – it deems critical for national or economic security.

The warning from the President comes a week after the US and the European Union agreed in a joint statement that they would together “address unjustified trade barriers”, and would “not impose customs duties on electronic transmissions”.

The 27-member bloc also confirmed it would not adopt network usage fees.

Yet the EU reiterated separately that it had not committed to alter EU digital regulations – potentially leaving the issue untouched as leverage for future trade talks, as the bloc pushes for tariff-free treatment of wine and spirits.

“We have made it very clear to the US that changes to our digital regulations – the Digital Markets Act and the Digital Services Act – were not on the table,” the EU said in a fact sheet.

Earlier this summer,

Canada backed down from imposing a digital tax

hours before it was due to go into effect, after Mr Trump suspended trade talks with the country over what he called an “egregious” tax.

Other countries – including Britain – have not rolled back their 2 per cent levy on revenue from search engines, social media services and online marketplaces. 

The push comes as the Organisation for Economic Cooperation and Development – a club of 38 mostly rich countries – continues to work on an agreement that would abolish digital taxes in favour of an international pact on how to allocate the profits of multinationals for tax purposes.

But that effort could also provoke opposition from the US, which could lose taxation rights. BLOOMBERG