US President Donald Trump has threatened to impose “a big tariff” on the United Kingdom amid escalating tensions over Britain’s Digital Services Tax.
Speaking during a White House press briefing, Trump criticised the levy, which applies a 2 per cent charge on large technology firms operating in the UK, many of which are American companies.
“We don’t like it when they target American companies because basically you’re talking about our great American companies,” he said. “We can meet that very easily by just putting a big tariff on the UK, so they better be careful.”
The tax, introduced in 2020, generates an estimated £800 million annually for the UK government but has long been a point of contention with Washington, which views it as discriminatory toward US tech firms.
Trump reiterated his stance, saying: “They think they’re going to make an easy buck that’s why they’ve all taken advantage of our country. If they don’t drop the tax we’ll probably put a big tariff on the UK.” He added that he has an “obligation to protect” American companies.
The comments come at a time of already strained relations between the US and the UK, including disagreements over international issues such as the situation in Iran.
In response, a spokesperson for the UK government, led by Keir Starmer, sought to ease tensions, stating: “The US is our closest ally, and we’ll always talk to them about any issues. We’ve got a very constructive relationship with the US across many issues.”
The dispute over digital taxation has been ongoing for several years, with previous US administrations also raising concerns about similar policies in Europe. Trump has previously warned that such measures could lead to retaliatory tariffs and restrictions on technology exports.
Business groups have also voiced concern over the potential economic impact. William Bain of the British Chambers of Commerce said: “While a new 10% tariff rate, instead of the threatened 15%, will provide some relief, it shows how difficult it is for businesses to plan ahead. It is far from clear what will happen next and whether a higher tariff rate is still on the way.”
He added that the risk of further trade measures remains, urging the government to prepare for possible escalation.