US President Donald Trump has issued a warning to the UK, threatening to impose tariffs if the country does not eliminate its digital services tax on American social media giants. The tax, implemented in 2020, imposes a 2% levy on the revenues of major US tech companies operating in the UK. Trump stated during a press briefing that the UK could face significant tariffs if it does not abolish the tax, emphasizing the potential consequences.
The tax targets companies with global digital revenues exceeding £500 million, with at least £25 million coming from UK users. Trump criticized the tax laws as unfairly targeting top global companies and accused countries like the UK of taking advantage of the US. Despite discussions during the UK-US trade agreement in May 2025, the digital services tax was left unchanged. When questioned about the severity of potential tariffs, Trump indicated they would exceed the revenues generated by the levy.
The escalating tensions in UK-US relations have been further exacerbated by recent events, including Trump’s comments on the flexibility of the trade agreement between the two nations. Addressing the UK Parliament, Sir Keir Starmer affirmed the country’s stance of not getting involved in conflicts like the Iran war, despite pressure from the US. Trump’s threats of tariffs are in line with his previous declarations to retaliate against nations implementing digital taxes affecting American technology companies. Several European countries have similar digital services taxes, prompting Trump to vow to protect American tech firms from discriminatory actions by imposing additional tariffs on offending nations.
Requests for comments from Downing Street have been made by PA Media regarding the situation. Stay updated on Iran developments by following our live blog.