The Trump administration has threatened to impose 100% tariffs on countries that levy digital services taxes (DSTs) aimed at American technology companies, putting allies including the UK, France, and Canada directly in the crosshairs. The move revives a trade confrontation that had been simmering since DSTs were first introduced in Europe and elsewhere as a way to tax revenues earned by US tech giants within their borders. UK businesses are already adjusting contingency plans in anticipation of potential economic fallout.
A 100% tariff regime on DST countries would hit transatlantic trade broadly, not just tech — UK exporters in goods and services face collateral damage if retaliatory cycles escalate. US mega-cap tech companies like Alphabet and Meta could paradoxically benefit if foreign DSTs are rolled back under pressure, while European and UK equities face near-term selling pressure as trade risk reprices.
Next G7 trade ministers meeting (expected mid-June). UK Spring Statement follow-up on digital tax policy. Any formal USTR Section 301 investigation announcement, which would be the legal trigger for actual tariff implementation.
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