Trump threatens 100% tariff on countries charging digital services tax: Will India be affected?

US chairperson Donald ruff warned on fri that he would impose a 100% tariff on goods from any rural area that charges a digital services assess on American companies, adding that existing trade agreements with those countries would also be scrapped.In a post on his Truth Social platform, he wrote, "Any Country that imposes such a Tax will immediately be met with a 100% TARIFF on any and all Goods sent to the United States of America."He added that "this TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not."The Trump administration has been a strong opponent of the digital services tax, which the US president has repeatedly said unfairly singles out major American technology companies, including Alphabet Inc. And Meta Platforms, Inc.Will India be affected?Most likely not.India has already withdrawn both parts of its Equalisation Levy, commonly known as the "Google Tax", which mainly applied to foreign technology companies, including those based in the US.The "Google Tax" is India's Equalisation Levy, introduced in 2016 on payments made to non-resident digital companies for providing online advertising services.The levy was fixed at 6% and applied to overseas technology companies that earned advertising income from Indian businesses, even if they had no physical presence in India.Last year, the levy on digital advertising services offered by foreign technology companies was abolished through changes made in the Finance Bill, 2025, with effect from April 1, 2025. At the time of the withdrawal, government officials told HT that the decision to remove the tax was partly intended to reduce trade tensions with the US.India had already removed the 2% Equalisation Levy on non-resident e-commerce operators through the Finance Act, 2024.Who will be affected?Mostly, the European Union (EU) nations.Trump's announcement came a day after EU member states approved a trade deal negotiated with the US last year. The agreement limits tariffs on European imports to 15%. However, digital services taxes were left out of the deal and remain a major point of disagreement between the US and the EU.As most of the world's biggest technology companies are based in the US, Trump believes digital services taxes create barriers for American exports.Earlier this month, he warned that he would impose a 100% tariff on French wine and champagne unless France withdrew its digital services tax on technology companies.Notably, France introduced a 3% tax in 2019 on revenue earned within the country by technology companies, including US firms such as Facebook, Amazon, Apple, and Alphabet, Google's parent company.Responding to Trump's latest warning, the EU on Friday said it would "respond swiftly and decisively to defend its rights and regulatory autonomy", news agency AFP quoted a spokesperson for the European Commission as saying.The office of the US trade representative has for years warned France, Britain, Austria, Spain and several other European countries that they could face retaliatory tariffs if they impose digital services taxes.With inputs from agencies