US President Donald Trump has threatened to impose tariffs on the UK if it does not drop its digital services tax on American social media firms.
The digital services tax, introduced in 2020, imposes a 2% levy on the revenues of several major US tech companies.
Speaking to reporters from the Oval Office on Thursday, Trump said: “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.
“If they don’t drop the tax, we’ll probably put a big tariff on the UK.”
The tax targets companies whose worldwide revenues from digital activities exceed £500m, with more than £25m of the revenue from UK users.
According to a 2025 Treasury review, the levy raised more than £800m in 2024–25, up from £678m in 2023–24.
Trump argued the laws, which have long been a source of tension in UK-US relations, targeted “top companies in the world”.
“The UK did it, a couple of other people did it,” he said. “They think they’re going to make an easy buck, that’s why they’ve all taken advantage of our country.”
The digital services tax went unchanged under the UK–US trade deal agreed in May 2025, despite being a point of discussion.
Asked how high the tariff would be, the president said it would be “more than what they’re getting” from the levy.
“What we’ll do is we’ll reciprocate by putting something on that’s equal or greater than what they’re doing,” he said.
The latest remarks add to wider strains in UK-US relations, which have deteriorated after Sir Keir Starmer ruled out British involvement in the conflict in the Middle East.
Earlier this month, Trump suggested the terms of the UK-US trade agreement brokered last year “can always be changed” in an interview with Sky News.
Addressing pressure from the US over the Iran war during Prime Minister’s Questions, Starmer told MPs: “My position on the Iran war has been clear from the start.
“We’re not going to get dragged into this war. It is not our war. A lot of pressure has been applied to me to take a different course, and that pressure included what happened last night.
“I’m not going to change my mind. I’m not going to yield. It is not in our national interest to join this war, and we will not do so. I know where I stand.”
Trump’s comments come months after similar US threats to impose new tariffs and export controls on countries with digital taxes or regulations affecting American tech giants.
A number of European countries, like France, Italy and Spain, have a digital services tax.
In a post on Truth Social from August 2025, Trump said he would “stand up to countries that attack our incredible American Tech Companies”.
“Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology,” he wrote.
“This must end,” he said and vowed that “unless these discriminatory actions are removed”, he would “impose substantial additional tariffs” on the offending nation’s exports to the US.
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