US President Donald Trump has issued a warning to the UK, stating that tariffs will be imposed if the UK does not eliminate its digital services tax on American social media giants. The tax, initiated in 2020, imposes a 2% levy on the revenues of prominent US tech companies. Trump mentioned during a press briefing at the Oval Office that the issue could be resolved by implementing tariffs on the UK if they do not withdraw the tax.
The tax is applicable to companies with global digital revenues exceeding £500 million, with at least £25 million of those revenues generated from UK users. Trump criticized the legislation as targeting major global companies and accused the UK and other countries of taking advantage of the United States.
Despite discussions, the digital services tax remains unchanged in the UK–US trade agreement established in May 2025. President Trump indicated that any tariffs imposed by the US would exceed the revenue gained from the UK tax.
Tensions between the UK and the US have escalated, particularly following Sir Keir Starmer’s refusal to involve Britain in the Middle East conflict. Trump hinted at the possibility of altering the terms of the UK-US trade deal negotiated the previous year.
In a separate development, Trump threatened to introduce tariffs and export controls on nations with digital taxes affecting American tech companies. Various European countries, including France, Italy, and Spain, have implemented digital services taxes. Trump emphasized his commitment to defending American technology companies against discriminatory practices, pledging to impose additional tariffs on offending nations.
PA Media has reached out to Downing Street for a response. For the latest updates on Iran, follow our live blog by clicking the provided link.
