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Donald Trump has warned he could slap fresh tariffs on the UK if it refuses to scrap its digital services tax, escalating tensions between London and Washington.
Speaking from the Oval Office, Trump said the US could “very easily” respond to the levy by targeting British exports.
“We’ve been looking at it and we can meet that very easily by just putting a big tariff on the UK, so they better be careful”, he said.
“If they don’t drop the tax, we’ll probably put a big tariff on the UK.”
Row centres on tax targeting US tech giants
The UK’s digital services tax, introduced in 2020, imposes a two per cent levy on revenues generated from UK users by large tech firms, including social media platforms.
It applies to companies with global digital revenues above £500m, with at least £25m linked to UK users. According to Treasury figures, the tax raised more than £800m in 2024/25.
Trump argued the policy unfairly targets American companies. “The UK did it, a couple of other people did it” he said.
“They think they’re going to make an easy buck…they’ve all taken advantage of our country.”
He added that any US response would go beyond the value of the tax itself: “What we’ll do is we’ll reciprocate by putting something on that’s equal or greater than what they’re doing.”
The warning comes despite the tax remaining in place under the UK-US trade deal agreed in 2025, where it had been a key sticking point.
Trade tensions resurface
The latest comments risk reopening a transatlantic trade dispute at a sensitive time for Keir Starmer’s government.
Relations between the two countries have cooled in recent weeks, particularly after the UK ruled out involvement in the conflict in the Middle East – a position that has drawn criticism from Washington.
Earlier this month, Trump suggested the terms of last year’s UK-US trade agreement “can always be changed”, showing a willingness to revisit existing arrangements.
The US has repeatedly pushed back against digital taxes globally, arguing they disproportionately affect American tech giants. Similar levies are in place across Europe, including in France, Italy and Spain.
In a previous post, Trump said such measures were designed to “harm, or discriminate against, American technology”, and warned that countries maintaining them could face “substantial additional tariffs”.
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