US President Donald Trump has threatened to impose “significant tariffs” on the United Kingdom if it does not scrap its digital services tax on major American technology companies.
The warning comes amid renewed tensions between Washington and London over the UK’s digital taxation regime, introduced in 2020, which applies a 2% levy on revenues generated by large tech firms operating in the British market.
Speaking to reporters at the Oval Office on Thursday, Trump said the issue could be resolved through trade measures, warning that the US could respond with substantial tariffs if the tax remains in place.
He added that the UK should be cautious, stating that if the levy is not removed, Washington would likely impose tariffs on British exports.
The digital services tax targets companies with global digital revenues exceeding £500 million ($673 million), provided that at least £25 million of those earnings come from UK users.
The policy has long been a source of friction in US-UK relations, with American officials arguing that it disproportionately affects leading US technology firms.
Despite broader trade discussions and agreements, including a deal reached in May 2025, the tax was not removed and continues to remain a point of contention between the two allies.
Trump’s remarks follow a series of similar warnings in recent months, in which the US administration has threatened tariffs and export restrictions against countries introducing digital taxes or regulatory frameworks impacting American tech giants.
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