Trump Targets Digital Service Taxes with Tariffs

President Donald Trump has directed his administration to identify and impose tariffs on countries that levy digital service taxes (DSTs) on U.S. technology companies, such as Alphabet, Meta, Apple, and Amazon. This move is aimed at countering foreign governments' practices that Trump argues unfairly target American firms and appropriate the U.S. tax base. Countries like Canada and France, which collect significant revenues from these taxes, are specifically named, and retaliatory tariffs are being considered to address the $2 billion annual burden these taxes place on U.S. businesses. Trump's memorandum revives investigations from his first term and seeks to develop responsive measures against such international practices, emphasizing that only the U.S. should tax its firms. The memorandum also seeks to prevent policies that incentivize U.S. companies to share intellectual property or undermine free speech. This escalation adds to ongoing trade tensions, with some countries having withdrawn DST plans in favor of global tax negotiations, though these talks have stalled.