COLUMN: Trump's America vs. Fiscal Europe — Washington Chooses Its Enemies Among Its Allies

June 26 and the declaration of fiscal war

On June 26, 2026, Donald Trump brandishes a new tariff threat against Europe: a 100% duty on imports from any country that imposes a digital services tax targeting large American technology companies. The target is explicit — the tech giants: Meta, Alphabet, Amazon. The potential victims are equally clear: France, the United Kingdom, Italy, Spain, and several other European countries that have adopted or are considering adopting such taxes. This is not an ordinary trade dispute. It is a fracture between allies.

The American legal context is central to understanding the scope of this threat. The United States Supreme Court recently struck down the tariff powers Trump had claimed under IEEPA. Cornered, he turned to Section 122 of the Trade Act to maintain a global tariff of 10% — but this provision has a legal limit of 150 days. The 100% threat over digital taxes is therefore also a political maneuver aimed at projecting firmness on another commercial front at the precise moment his principal tariff powers are legally weakened. Trump is looking for a new arena. He found it in European digital taxation.

There is something profoundly revealing in this threat. Trump is not targeting China, nor Russia, nor Iran this time. He is targeting his democratic allies. Countries that share his stated values, that partly fund NATO, that supported Ukraine. And he is threatening them with a punitive tariff because they dare to tax American multinationals on their sovereign territory. That is a fairly clear definition of what the word "ally" means to this administration.

A tax on locally created value

The digital services taxes adopted by several European countries are not protectionist measures in their original design. They aim to correct a real fiscal distortion: companies like Google, Amazon, and Meta generate colossal revenues in Europe — drawn from European users, European data, advertising targeted at European markets — but pay corporate taxes in low-tax countries like Ireland or Luxembourg, through sophisticated tax-optimization structures. These digital taxes seek to tax value where it is created.

The Canadian precedent as a warning

Canada already lived through this confrontation. By adopting its own digital services tax, Ottawa found itself in Washington's crosshairs; the US suspended trade negotiations with Canada and threatened tariff retaliation. Canada ultimately suspended its digital tax under American pressure, illustrating the coercion dynamic Trump intends to replicate at the European scale. The logic is simple and brutal: tax our companies and we tax your goods. This is not diplomacy — it is commercial extortion dressed up as tax policy.

I remember the Canadian precedent and I read it as a full-scale test. Ottawa buckled. Washington registered the lesson and is deciding to apply it on a larger scale. Will Europe be as accommodating as Canada? The answer to that question will define a share of the transatlantic balance of power for years to come.

Private companies at the service of state policy

What is striking about Trump's position is the total fusion between the interests of private American companies — Meta, Alphabet, Amazon — and federal government commercial policy. These companies pay minimal taxes through legal optimization structures, accumulate record profits, and now enjoy explicit government tariff protection against any foreign attempt to tax their local profits. This is a form of technological mercantilism on a planetary scale.

The value of data as a sovereignty issue

Behind the fiscal question lurks a deeper sovereignty issue. Google, Amazon, and Meta capture and process massive quantities of personal and behavioral data on hundreds of millions of European citizens. This data feeds artificial intelligence models, advertising systems, and targeting capabilities that enrich American companies — without Europe receiving a fiscal compensation proportional to the value extracted. When Europe says its citizens and markets deserve a share of that value in the form of a tax, Washington responds with a threat of 100% duties. That is digital sovereignty versus technological imperialism.

I am not naive: European digital taxes have their own design problems. But the principle behind them — that a company generating value in a country should pay taxes there — is fundamentally sound. That the United States responds to this elementary principle of fiscal justice with a tariff threat says a great deal about this administration's real priorities.

A variable-geometry partnership

The Atlantic alliance is theoretically built on shared values — democracy, the rule of law, national sovereignty, market economy — and on collective security guaranteed by NATO. The European countries targeted by Trump's threat — France, Italy, the United Kingdom, Spain — are active NATO members, contribute financially to collective defense, and participated in efforts to support Ukraine since Russia's 2022 invasion. They are, by definition, allies. And Trump is threatening them with punitive tariffs for exercising their fiscal sovereignty.

The declaration that will "supersede trade agreements"

Trump was explicit on one particularly alarming point: the tariff threat tied to digital taxes will "supersede existing trade agreements." This declaration is a legal and diplomatic bomb. It means the United States is prepared to unilaterally violate bilateral and multilateral trade commitments in the name of protecting its large technology companies' profits on the sovereign territory of those same allies. It is a declaration of commercial imperialism that calls into question American reliability as a partner in international agreements on all files — not just digital.

When a country says its trade policy will "supersede agreements," that is a way of saying it no longer considers itself bound by the rules it helped establish. This should be alarming well beyond the digital tax file. If the United States walks back its trade commitments when it suits them, what is the foundation for trust in their security commitments?

The Supreme Court as an unexpected brake

Trump's threat must be read in light of his recent legal constraints. The Supreme Court struck down the broad tariff powers the administration had claimed through the International Emergency Economic Powers Act. This ruling forces Trump to use alternative instruments — notably Section 122 of the Trade Act — which have temporal and sectoral limits. The 100% threat on digital taxes is not automatically enforceable: it requires a legal process, formal investigations, and potentially proceedings before the WTO.

Section 122 and its temporal limits

Section 122 of the Trade Act allows the president to impose additional duties to correct balance-of-payments imbalances, but with a limit of 150 days without Congressional approval. This constraint makes any tariff threat grounded on this basis structurally unstable. European negotiators know it. They also know that the US Congress — even in its current configuration — could block punitive tariffs against NATO allies if this threatened American jobs tied to exports to Europe. The threat is real, but its legal foundations are precarious.

The legal fragility of this threat does not make it any less politically dangerous. Even an illegal or unenforceable threat creates economic uncertainty, delays investments, disrupts supply chains. Trump knows this. Uncertainty itself is a weapon he wields with considerable effectiveness, regardless of whether the threat is actually executable.

The temptation of individual capitulation

Faced with the American threat, the European response is structurally weakened by a recurring temptation: that of individual capitulation. European countries have export-heavy economies significantly exposed to the American market. Germany exports cars, machinery, and chemicals. France exports luxury goods, aerospace products, and food. Each European government calculates its individual exposure and weighs the political cost of a confrontation with Washington. This individual calculation weakens the European Union's collective position.

The European Commission facing fragmentation

The European Commission — the sole body negotiating on behalf of the 27 member states on trade matters — finds itself in a delicate position. It must defend the principle of European fiscal sovereignty, maintain member states' cohesion, and avoid a tariff escalation with the United States that would destabilize an already fragile European economy weakened by the consequences of the war in Ukraine and partial deindustrialization. It is an impossible balance between principles and pragmatism — and Trump knows this perfectly when he issues his ultimatums.

Europe cannot win this fight if it does not fight it together. I have said it for NATO, I say it for digital taxation: a member state that negotiates separately with Washington weakens all the others. France suspending its digital tax under American pressure does not just concede on taxation — it tells Trump that the pressure works. And Trump takes note for the next file.

The global minimum tax agreement as a negotiated solution

Yet there is a multilateral solution to this dispute: the OECD agreement on a global minimum corporate tax rate of 15%, negotiated between more than 130 countries and meant to create a fiscal floor preventing unfair competition between jurisdictions. This agreement represented a negotiated and balanced solution to the real problem of tax optimization by digital multinationals. Europe had begun implementing it. Developing countries supported it. The logic was sound.

Washington undermining its own multilateral commitments

But the United States, under the Trump administration, has progressively hollowed out the OECD agreement, refusing to implement the American component and pressuring other countries not to apply taxation to American subsidiaries. By now threatening 100% tariffs against countries that impose their own digital taxes, Washington is simultaneously undermining two fiscal solutions — the multilateral solution and the national solution. In doing so, it is asserting that American companies must benefit from a de facto tax exemption worldwide. This is an untenable position in the long run.

The OECD agreement was imperfect, but it was a globally negotiated compromise reached in good faith. Seeing it deliberately torpedoed by the administration that had participated in its negotiation is a betrayal of the multilateral rules that Washington claims to defend on other files. You cannot be a defender of the rules-based international order on one side, and deliberately undermine it on the other.

Tariffs that hit unrelated sectors

If Trump follows through on his 100% tariff threat against countries that have adopted digital taxes, the sectors hit will not be American technology companies — they will continue operating in Europe whatever the fiscal policy. The sectors that will suffer are traditional European exporters: French and German automotive industries, wines and spirits, Italian textiles, pharmaceuticals, machine tools. These are workers, small businesses, industrial regions that will pay the price of a fiscal dispute they did not start.

The chilling effect on governments

Beyond the direct economic effects, Trump's threat produces a calculated political chilling effect. Governments that were considering adopting digital taxes will reconsider. Countries that had already voted their tax into law will seek compromises. Tax authorities investigating tech giant tax optimization will slow their procedures. The objective may not even be to apply the 100% — it is to create enough uncertainty that European governments self-censor. This is intimidation as international fiscal policy.

I think of French SMEs, Bordeaux winemakers, Bavarian automakers who would end up as collateral victims of a fiscal dispute over technology companies that barely pay taxes in their own country. There is something profoundly unjust in this geography of collective punishment. And something revealing about whom this administration chooses to protect.

Available retaliatory tools

The European Union is not unarmed against this threat. It has considerable commercial firepower if it chooses to use it in a coordinated fashion. It can impose its own duties on carefully selected American products — targeting American states that are politically sensitive for Trump and the Republicans. It can activate proceedings before the WTO to challenge the legality of American measures. It can accelerate its digital markets regulation to strengthen competition with the tech giants and reduce European dependence on these platforms.

The need for European technological sovereignty

The real long-term response cannot be only defensive. It must be offensive and constructive. Europe must invest massively in its own technology champions — in cloud computing, in artificial intelligence, in semiconductors, in digital platforms that can compete with the tech giants on their own ground. As long as Europe is structurally dependent on American digital infrastructure, it will remain vulnerable to this type of fiscal and commercial coercion. Digital sovereignty is not a luxury — it is a first-order strategic necessity.

Europe has the human, financial, and institutional resources to build its own digital champions. What it lacks is the political will to treat digital technology as an existential priority rather than just another economic sector. Trump's threat should be the catalyst for this awakening. If it is not, the next threat will come with even greater force.

France, pioneer of the European digital tax

France was among the first to adopt a national digital services tax — the French GAFA tax — even before the OECD agreement was finalized. This unilateral decision had provoked a first confrontation with Washington under the first Trump administration, which had threatened duties on French champagne, handbags, and cheeses. France had then temporarily suspended its tax during OECD negotiations. This precedent shows that the pressure works — and that Paris can fold under sufficient targeted economic pressure.

Germany as the critical variable

Germany's position will be decisive in the collective European response. Berlin is both the largest European exporter to the United States and the country most exposed to American tariff retaliation. If Germany chooses conciliation with Washington to protect its automotive exports, it weakens the European Union's common position. If it chooses European solidarity, it bears the economic cost. This Berlin dilemma reflects the fundamental tension between national interests and European solidarity that Trump is deliberately seeking to exploit.

France has a particular talent for resisting Washington rhetorically while quietly negotiating accommodations. I do not judge this tactic — it has sometimes worked. But faced with a Trump administration that interprets every concession as a weakness to exploit further, rhetorical resistance without concrete substance could be the worst of both worlds.

Rules designed for a different world

The digital tax dispute exposes the limits of the World Trade Organization framework in the face of the 21st-century digital economy. The WTO's rules were designed for physical goods crossing borders — not for intangible digital services generated by user data and delivered via the internet without customs or clear geographical borders. The WTO has dispute-resolution mechanisms, but they are slow — often taking several years — and the appellate body has been paralyzed since the United States blocked the appointment of new judges.

American impunity in a system it controls

Washington thus enjoys partial impunity in its aggressive commercial maneuvers: it can threaten, impose, force concessions, and by the time the WTO rules on the legality of American measures — if it can do so in current conditions — the economic and political damage is already done. This is a cynical exploitation of a multilateral system that the United States largely helped build but bypasses the moment the rules of that system no longer directly serve its immediate interests.

There is bitter irony in watching a country that built the postwar international trade system, that was its principal beneficiary for decades, now dynamiting it from within when the rules it created are applied to itself. American hegemony will not disappear tomorrow. But its legitimacy erodes every time it chooses coercion over the rule of law.

When the West turns on itself

The commercial confrontation between the United States and its European allies sends a troubling signal to non-Western democracies — those the West is trying to convince to choose its camp against Chinese and Russian influence. If Washington's historic allies face threats of punitive 100% tariffs for exercising their legitimate fiscal sovereignty, why would a country like India, Brazil, or Indonesia choose the Western orbit rather than the bilateral arrangements offered by China, which does not condition its cooperation on compliance with unilaterally imposed fiscal rules?

The credibility of the Western order at stake

The West is in active competition with China to influence Global South countries. This competition rests in part on the attractiveness of the Western model — the rule of law, predictability of rules, respect for national sovereignty. When Washington threatens its own allies with punitive tariffs for exercising their fiscal sovereignty, it weakens precisely the model it claims to promote as an alternative to the Chinese authoritarian model. This is not collateral damage — it is an existential contradiction at the core of current American foreign policy.

I think of African, Asian, Latin American diplomats watching this confrontation and drawing their conclusions. They do not see a strong, coherent West defending universal principles. They see two power systems each defending themselves. And if both systems are equally coercive, why choose the one that also imposes digital taxes?

Plausible scenarios for the rest of 2026

Three scenarios are plausible for the months ahead. First scenario: Europe collectively capitulates, suspends its digital taxes, and negotiates a bilateral trade agreement with Washington that effectively rules out the possibility of taxing the tech giants on European soil. That is the path of least resistance — and the most probable if European governments remain divided. Second scenario: Europe collectively resists, imposes targeted countermeasures, and forces a multilateral negotiation within the OECD on a fiscal digital framework acceptable to all. That is the most difficult path — and the only one that preserves European sovereignty long-term.

The negotiated solution scenario

The third scenario — the most probable in the reality of diplomatic gamesmanship — is a negotiated intermediate solution: Europe modifies the design of its digital taxes to make them less specifically targeted at American companies, in exchange for an American commitment not to impose the punitive 100% tariffs. This solution would preserve appearances on both sides while solving the immediate practical problem. But it would not resolve the underlying question: how to fairly tax digital multinationals whose value creation is fundamentally deterritorialized in a fiscal world built on national borders.

The negotiated solution that lets everyone save face is probably the most reasonable in the short term. But it would simply push the problem to the next administration, the next crisis, the next threat. What Europe must do in parallel is build its digital sovereignty so as never again to be vulnerable to this type of coercion. Negotiate today, build tomorrow.

The right to tax as an expression of sovereignty

Behind the commercial dispute lies a fundamental question of political philosophy: does a democratic state have the right to tax companies that operate on its territory and profit from its citizens? The universal answer — and the one defended by international law — is yes, with reasonable and non-discriminatory limits. France, the United Kingdom, Italy, and other countries that have adopted digital taxes are exercising precisely this sovereign right. That Washington responds with a threat of 100% duties is a challenge to this fundamental right by the world's most powerful economic force.

The asymmetry of power as a structural factor

The asymmetry of economic power between the United States and individual European countries is a structural factor that any honest analysis must acknowledge. A country like Slovenia or Croatia cannot resist an American tariff threat in the same way as Germany or France. And even these large European economies are individually vulnerable. That is why only the European Union, speaking with one commercial voice on behalf of its 27 members and a market of 450 million consumers, has the levers necessary to resist American coercion without bearing prohibitive economic costs. Unity is strength — but only if it is real.

The right to tax is the very foundation of any democratic state. When a foreign power — even an allied one — threatens to punish a country for having exercised that right on its own territory, it is democracy itself that is being put under pressure. Europe must not let this precedent pass without a firm and coordinated response.

What this crisis reveals about the state of the alliance

Trump's threat over European digital taxes is not a commercial footnote — it is a revealing indicator of the state of the Atlantic alliance in 2026. An alliance where the most powerful partner does not hesitate to threaten its allies with punitive 100% tariffs to protect the profits of its technology multinationals on the sovereign territory of those same allies. An alliance where economic coercion replaces diplomatic persuasion. An alliance that survives, but whose foundations of mutual trust and respect for sovereignties are weakening with each ultimatum.

Europe must choose its response now

Europe must quickly choose between two postures: the collective resilience that preserves its fiscal and digital sovereignty, or the progressive capitulation that buys short-term commercial peace at the cost of its long-term autonomy. This choice is not only economic — it is political and identity-defining. A Europe that gives ground on its digital taxes under American pressure sends a lasting message about what it is prepared to defend and how far it will go to defend its fundamental sovereignty principles. Trump has asked the question. Europe's answer will define the face of the Atlantic alliance for the decade ahead.

The Atlantic alliance is more important than this fiscal dispute. I genuinely believe that. But an alliance that cannot allow its members to tax private companies on their own territory without risking a trade war is not an alliance of equal sovereignties. It is a relationship of dependence. And dependencies only last until one of the parties decides it has paid enough.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. I claim analytical clarity, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

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