Trump threatens heavy tariffs on nations enforcing digital services taxes

Donald Trump, from the White House on Tuesday, warned that countries enforcing digital services taxes will face heavy tariffs and chip export bans from the United States.

The warning was posted on Truth Social, where Trump wrote:

“I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that 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.”

Trump also wrote that:

“We will institute Export restrictions on our Highly Protected Technology and Chips.” He didn’t stop there. In the same post, he added, “Show respect to America and our amazing Tech Companies or, consider the consequences!”

The message was aimed at dozens of nations, mostly U.S. trade partners, that are currently applying digital taxes targeting American platforms like Meta, Alphabet, and Amazon.

Trump has long said these policies are built to punish American innovation. And he’s done more than talk. Back in June, when Canada was set to activate its own DST, Trump pulled out of trade negotiations.

Just before the tax took effect, Prime Minister Justin Trudeau’s government walked it back, a move the White House immediately claimed as a win. “Canada caved,” officials said publicly.

Trump pushes trade threats over magnets, chips, and planes

Digital taxes aren’t the only issue on Trump’s table. On Monday, while speaking to reporters following a meeting with South Korean President Lee Jae Myung, Trump threatened tariffs on China’s rare-earth magnet exports, saying, “They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something.” He tied the issue to a critical supply chain that the U.S. depends on for national security and tech manufacturing.

Trump also revealed that airplane parts are being used as leverage in his ongoing confrontation with China. He said, “200 of their planes were unable to fly because we were not giving them Boeing parts purposely because they weren’t giving us magnets.” That threat landed while Boeing is still finalizing a major deal with China involving as many as 500 aircraft. The talks cover models, types, and delivery terms.

China’s monopoly on rare-earth magnets gives them major control in any tech-related negotiation. They produce 90% of the global supply, and they dominate refining too. In April, China placed export controls on the materials, which sent shipments crashing.

But by June, exports to the U.S. rebounded, surging 660% from the month before, and climbing another 76% in July. These magnets are essential for electronics, electric vehicles, and defense systems, making the U.S. position in that supply chain especially vulnerable.

Digital taxes draw bipartisan backlash in U.S.

Trump’s fight against digital taxes hasn’t just come from the Oval Office. In 2023, Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo jointly warned the U.S. Trade Representative that Canada’s DST would expose “innovative American companies to arbitrary discrimination.” The letter was part of a growing push inside Congress to defend U.S. firms from foreign tax grabs.

The countries enacting DSTs say they’re simply asking for fairness. They argue that tech companies earn billions from users in their territory but pay nothing in return. They see the taxes as compensation for digital services that operate inside their borders while avoiding domestic tax systems.

Trump doesn’t care for that reasoning. He believes these rules are custom-built to target American companies, especially the ones big enough to show up on global balance sheets. His latest post drew a line: any law that hits U.S. tech will be treated as a hostile act.

That includes not just taxes but any regulation, rule, or proposal tied to digital services. And now, Trump is adding tech exports and rare-earth materials into that same trade fight.

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