President Donald Trump vowed Monday to impose “substantial” new tariffs and restrict U.S. chip exports for all countries that do not remove digital taxes and related regulations.
Trump wrote on Truth Social that digital services taxes, or DSTs — which are currently imposed by dozens of countries — “are all designed to harm, or discriminate against, American Technology.”
“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 wrote.
He added that the U.S. would also “institute Export restrictions on our Highly Protected Technology and Chips.”
“Show respect to America and our amazing Tech Companies, or consider the consequences!” Trump wrote.
Trump has long sought to pressure U.S. trade partners into dropping the taxes, which are typically structured to apply only to the world’s largest and most established tech companies, like Meta, Alphabet and Amazon. They also happen to be American companies.
Digital service taxes have already proven to be a potential make-or-break issue for Trump in his administration’s ongoing trade negotiations.
The countries which enact digital services taxes argue that massive tech titans like Amazon operate within their borders and generate huge profits from their citizens while paying little or no taxes to the respective governments.
Sri Lanka is also set to impose indirect taxes on the cross-border supply of services provided through electronic platforms, a key reform in the 2025 Budget proposal for Sri Lanka, shaped in part by ongoing discussions with the International Monetary Fund (IMF).
The reform broadens the value-added tax (VAT) base to include non-resident persons providing services through electronic platforms, even in the absence of the service provider having a fixed place of business in Sri Lanka.
The applicable VAT rate in Sri Lanka will be 18 per cent, effective from 1 October 2025. (CNBC/ Newswire)
