Trump Takes Aim at Digital Taxes. What It Means for Tech Stocks.

U.S. technology companies have been the main targets of digital taxes and regulation in the European Union. (JUSTIN TALLIS/AFP via Getty Images)

President Donald Trump is threatening to penalize countries that impose digital taxes and regulation on major technology companies. It’s good news for companies like Google, Meta Platforms , and Amazon.com .

“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., and institute Export restrictions on our Highly Protected Technology and Chips,” Trump wrote in a post on his Truth Social platform on Monday evening.

Digital taxes are placed on certain revenue streams generated by online platforms and apps. They have been a bugbear of Trump’s because they largely hit U.S. firms such as Alphabet , Google’s parent; Amazon; and Meta, the parent of Facebook.

Nineteen countries, including the biggest European economies and Canada, have passed digital services taxes on revenue that multinational tech firms reap within their territory. However, Canada has said it won’t collect its levy following trade negotiations with the Trump administration.

Notably, Trump’s latest comments go beyond taxes. His references to regulation is likely to raise concerns in the European Union about retaliation against enforcement of the bloc’s Digital Markets Act, which came into force this year.

The Digital Markets Act designates sites provided by companies including Alphabet and Meta as “gatekeeper” platforms. The companies have to comply with certain conditions, such as sharing data with rivals and making their services interoperable with competitors.

Apple received a €500 million ($583 million) penalty earlier this year for breaching the Digital Markets Act. Meta was fined €200 million.

“It is the sovereign right of the EU and its member states to regulate economic activities on our territory, which are consistent with our democratic values,” Paula Pinho, chief spokesperson for the European Commission, said in a news conference on Tuesday. The commission is the EU’s executive arm.

Write to Adam Clark at adam.clark@barrons.com