Overview
- Trump, speaking from the Oval Office on Thursday, warned he will "probably" levy a big tariff on the UK unless it scraps its digital services tax and said any duty would match or exceed the tax take.
- Downing Street said its position is unchanged and called the tax a fair way to make large platforms pay their share, while noting it intends to replace the levy once an OECD global agreement takes effect.
- The UK’s digital services tax is a 2 percent charge on revenue from UK users at very large online firms with more than £500 million in global digital sales and at least £25 million from the UK, raising over £800 million in 2024–25.
- Trade analysts warn tariffs hit imported goods rather than government coffers, which could raise prices for American buyers and hurt UK exporters such as spirits, cashmere and automotive parts.
- The threat lands as UK–US ties show strain and before a planned state visit by King Charles, and it follows a broader U.S. campaign against countries that tax American tech even after a 2025 UK–US trade deal left the levy in place.