EU Set to Drop Digital Tax Plan in Major Win for Apple and Trump [Report]

The European Commission has reportedly abandoned its plan to impose a new digital tax on major tech companies, a significant reversal that hands a victory to U.S. firms like Apple and to President Donald Trump, according to a new report from Politico.

With the EU and the U.S. in the final stretch of trade negotiations, a document seen by the outlet shows the digital tax has been removed from a list of proposed new revenue sources for the bloc's next seven-year budget. The reversal comes after the EU had floated the tax as recently as May to help repay post-COVID debt. The move is widely seen as a strategic play by Brussels to secure more favorable trade terms and avoid the kind of retaliatory tariffs President Trump has threatened in the past.

While the news is a win for Apple on one front, the company remains locked in a fierce regulatory battle with the EU over its Digital Markets Act (DMA). The tech giant has been under intense pressure from the European Commission over its compliance with the new law. In April, the EU fined Apple €500 million for violating anti-steering rules that prevented developers from directing users to cheaper offers outside the App Store. Just last month, Apple was reportedly in last-minute talks to avoid further penalties.


Apple has also pushed back on other fronts, appealing a separate EU order that mandates greater interoperability between iOS and third-party devices, arguing the rules threaten its products' foundation and pose security risks. The Trump administration has also weighed in, with the White House previously calling the EU fines "economic extortion" and a "direct threat to free civil society."

Even before this latest development, there were signs the EU was treading carefully. Reports from March suggested the EU had already opted for smaller fines than it could have, wary of potential backlash from the U.S. While the EU is backing down on the digital tax, it is reportedly still planning to propose new levies on e-waste, tobacco, and large corporations. The fate of those proposals, however, will be decided over two years of negotiations, requiring unanimous approval from all member states. For now, it appears the threat of a broad digital tax has been shelved.

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