Digital Tax Talks May Result in Trade War Even If Democrats Win

A brewing fight about which country has the right to tax some of the world’s most profitable companies, including Facebook Inc. and Alphabet Inc.’s Google, could devolve into a multi-front trade war, regardless of whether President Donald Trump is still in the White House.

Even if a Democrat wins the presidency in November, it could be tempting to continue the Trump administration’s policy of using trade sanctions to retaliate against new taxes on U.S. tech companies.

A tit-for-tat trade war is already building with France, which passed a 3% tax on large tech companies that went into effect at ...