A year ago, when President Donald Trump threatened sky-high tariffs on nearly everything coming from everywhere, global markets trembled and foreign leaders scrambled. Now the same threat barely registers.
That’s largely thanks to a February Supreme Court ruling that stripped the president of his most potent tariff weapon and left him with far more limited options for making good on his threats. But the verdict hasn’t stopped Trump from trying anyway.
On Friday, Trump posted on Truth Social that any European country implementing a digital services tax would be “immediately met with a 100% tariff on any and all goods sent to the United States,” adding that the levy would “supersede trade deals” already in place.
“Digital services” encompasses a wide range of businesses, from Google’s ads to Spotify streams. Digital services taxes are structured such that governments can collect revenue from large companies that operate online — even if the business is unprofitable.
Given many of the largest tech businesses are American, Trump has previously argued that digital services taxes disproportionately punish them. The Congressional Research Service, which is officially nonpartisan, agreed with that assessment in certain instances.
Months ago, when Trump followed through on such threats, he invoked the International Emergency Economic Powers Act, a 1974 law the administration argued gave him the authority to swiftly impose tariffs. No previous president had used the law that way, and the Supreme Court ultimately ruled that doing so exceeded his presidential authority.
“When Congress grants the power to impose tariffs, it does so clearly and with careful constraints,” Chief Justice John Roberts wrote in his majority opinion. “It did neither here.”
“None of the authority Congress has granted the president to impose tariffs allows him to do so whenever he wants,” said Jeffrey Schwab, senior counsel and director of litigation at the Liberty Justice Center, which led the Supreme Court tariff case. “Unless and until those procedures are followed and the conditions met, the president cannot impose tariffs,” Schwab told CNN on Friday.
After the February ruling, the administration turned to a more complex plan B: a uniform 10% tariff that’s set to expire next month. The president also initiated a series of investigations using a trade law known as Section 301, which could eventually lead to higher tariffs – but may take months to complete.
During his first term he initiated several Section 301 investigations into European nations’ digital service taxes. But they ultimately didn’t result in higher tariffs. Instead, the investigations were essentially used as leverage to negotiate.
There’s certainly the possibility that Trump will turn back to those investigations to fast-track the process this time around. But instant 100% tariffs look like a pipe dream given the constraints of the trade law.
