Trump threatens ‘big tariff’ if UK does not drop digital services tax on US tech firms

24th April, 2026 | News

Donald Trump has warned that the United States could impose steep tariffs on the United Kingdom if it refuses to scrap its digital services tax targeting major American tech firms.

The tax, introduced in 2020 by the UK Government, places a 2% levy on revenues generated from UK users by large digital companies with global earnings above £500 million and at least £25 million linked to the UK market. It primarily affects US-based tech giants operating in social media and online services.

Speaking to reporters, Trump cautioned that the UK “better be careful,” suggesting Washington could retaliate with tariffs exceeding the revenue generated from the levy. He argued that such taxes unfairly target American companies and claimed the US was being “taken advantage of.”

The warning adds further strain to relations between Washington and London, already under pressure from broader geopolitical tensions. Trump has repeatedly criticised UK policies, including those under Keir Starmer, and signalled that existing trade arrangements between both countries could be revisited.

Although the digital services tax remained unchanged under a UK-US trade agreement reached in 2025, Trump indicated that such agreements are not fixed and could be renegotiated. His administration has previously threatened similar actions against other countries with comparable taxes, including France, Italy, and Spain.

Meanwhile, the UK government has yet to formally respond to the latest remarks. However, Starmer has maintained a firm stance on broader foreign policy issues, particularly distancing the UK from involvement in the ongoing Middle East conflict.

The dispute highlights a growing global divide over how to tax large technology firms, with several countries pushing for greater contributions from multinational digital companies, while the US continues to oppose measures it يرى as discriminatory toward its tech industry.