{"id":63800,"date":"2026-06-26T12:38:22","date_gmt":"2026-06-26T16:38:22","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/trump-threatens-100-tariffs-over-digital-taxes-kashkari-signals-rate-hikes-amid-ai-boom\/63800\/"},"modified":"2026-06-26T12:38:22","modified_gmt":"2026-06-26T16:38:22","slug":"trump-threatens-100-tariffs-over-digital-taxes-kashkari-signals-rate-hikes-amid-ai-boom","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/trump-threatens-100-tariffs-over-digital-taxes-kashkari-signals-rate-hikes-amid-ai-boom\/63800\/","title":{"rendered":"Trump Threatens 100% Tariffs Over Digital Taxes; Kashkari Signals Rate Hikes Amid AI Boom"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>President Trump threatened an immediate 100% tariff<\/strong> on all goods from any country that imposes a <strong>Digital Services Tax (DST)<\/strong> on American technology companies, potentially impacting major U.S. tech giants and global trade partners.<\/li>\n<li><strong>Minneapolis Fed President Neel Kashkari<\/strong> shifted his policy outlook to favor <strong>one interest rate hike in 2026<\/strong>, citing persistent inflation driven by &quot;skyrocketing&quot; costs in the <strong>AI infrastructure<\/strong> sector and ongoing Middle East instability.<\/li>\n<li><strong>Tensions in the Strait of Hormuz spiked<\/strong> as President Trump accused Iran of a &quot;foolish violation&quot; of a recent ceasefire after four attack drones targeted commercial shipping, with one vessel reportedly sustaining damage.<\/li>\n<li><strong>U.S. refining capacity saw a significant decline<\/strong>, dropping by <strong>263,000 barrels per day (b\/d) in 2025<\/strong>, according to a new government report, even as refiners currently push run rates to near-maximum levels to meet robust demand.<\/li>\n<li><strong>Fitch Ratings revised its 2026 global sovereign outlook to &quot;deteriorating,&quot;<\/strong> noting that while the U.S.-Iran conflict creates immense pressure, it has not yet disrupted the broader global credit perspective.<\/li>\n<\/ul>\n<h2>Trump Issues Tariff Ultimatum to Protect Big Tech<\/h2>\n<p>President <strong>Donald Trump<\/strong> announced via Truth Social that any nation implementing a <strong>Digital Services Tax (DST)<\/strong> on American firms will face an immediate <strong>100% tariff<\/strong> on all exports to the U.S. The move is aimed at shielding &quot;Big Tech&quot; companies\u2014including Apple (<a href=\"\/stock\/AAPL\">AAPL<\/a>), Microsoft (<a href=\"\/stock\/MSFT\">MSFT<\/a>), Alphabet (<a href=\"\/stock\/GOOGL\">GOOGL<\/a>), Amazon (<a href=\"\/stock\/AMZN\">AMZN<\/a>), and Meta (<a href=\"\/stock\/META\">META<\/a>)\u2014from European and global tax initiatives. Trump emphasized that these tariffs would <strong>supersede any existing trade deals<\/strong>, whether signed or currently being implemented.<\/p>\n<p>Market analysts warn that this protectionist stance could trigger a <strong>&quot;risk-off&quot; move<\/strong> in technology and consumer discretionary sectors. Investors are reportedly repricing growth expectations for U.S. tech firms as the threat of retaliatory trade measures from the European Union and other partners looms.<\/p>\n<h2>Fed&#39;s Kashkari Pivots to Hawkish Stance on AI Inflation<\/h2>\n<p>Minneapolis Federal Reserve President <strong>Neel Kashkari<\/strong> delivered a hawkish surprise on Friday, revealing he has &quot;penciled in&quot; <strong>one interest rate hike for 2026<\/strong>. This marks a reversal from his March projection of a rate cut, driven by concerns that inflation remains stubbornly high even when excluding volatile energy costs. Kashkari specifically identified <strong>Artificial Intelligence (AI)<\/strong> development as a primary inflationary driver in the short term.<\/p>\n<p>According to Kashkari, the hundreds of billions of dollars flowing into <strong>AI data center construction<\/strong> and related infrastructure are causing prices to &quot;skyrocket&quot; in those sectors. While he remains optimistic about long-term job prospects, he noted that the Fed may need to move rates <strong>&quot;as high as we need to&quot;<\/strong> to bring inflation back to the 2% target, despite the potential for economic harm.<\/p>\n<h2>Middle East Ceasefire Strained by Drone Attacks<\/h2>\n<p>The fragile geopolitical landscape faced a new test as President Trump accused <strong>Iran<\/strong> of violating a week-old ceasefire memorandum of understanding. Trump reported that Iran launched at least <strong>four &quot;One Way Attack Drones&quot;<\/strong> at ships in the <strong>Strait of Hormuz<\/strong>, with one drone striking the upper deck of a large cargo vessel. Although the ship was able to proceed, the incident led the UN\u2019s maritime agency to temporarily suspend guidance for stranded ships.<\/p>\n<p>In a parallel development, Iranian official <strong>Azizi<\/strong> issued a warning to <strong>Gulf Cooperation Council (GCC)<\/strong> leaders, claiming that &quot;outsourcing security&quot; to the U.S. has made the region less secure. Despite the friction, <strong>Fitch Ratings<\/strong> noted that the global credit environment remains resilient for now, though it has deteriorated since the initial &quot;oil shock&quot; of the U.S.-Iran conflict.<\/p>\n<h2>Energy Sector: Refining Capacity Shrinks Amid High Demand<\/h2>\n<p>A new government report confirmed that <strong>U.S. refining capacity decreased by 263,000 barrels per day<\/strong> in 2025. Despite this contraction, the Energy Information Administration (<strong>EIA<\/strong>) reports that current refineries are operating at <strong>96.1% capacity utilization<\/strong>, processing approximately <strong>17.1 million b\/d<\/strong>.<\/p>\n<p>Refiners are reportedly delaying essential maintenance to capitalize on strong product margins and high demand for diesel and jet fuel. However, analysts at <strong>Energy Aspects<\/strong> warn that operating near maximum capacity for extended periods increases the risk of <strong>unplanned outages<\/strong>, which could further tighten global fuel supplies if the Strait of Hormuz remains a contested corridor.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways President Trump threatened an immediate 100% tariff on all goods from any country that imposes a Digital Services 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