United States President Donald Trump has issued a fresh warning to the United Kingdom, threatening to impose sweeping tariffs unless London scraps its Digital Services Tax, which Washington argues unfairly targets American technology companies.
Speaking to reporters at the White House on Thursday, Trump directed his criticism at the 2 percent levy applied to large digital platforms operating in the UK, including companies such as Apple, Google and Meta.
“We don’t like it when they target American companies because basically you’re talking about our great American companies,” he said. “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 UK’s Digital Services Tax, sometimes called the Google Tax, applies to companies with UK revenues above £25 million or global revenues exceeding £500 million, and has raised significantly more than initially forecast since its introduction in April 2020, now generating around £800 million annually for the Treasury.
Washington’s objection is that the tax disproportionately targets American technology companies. However, data from HMRC shows that around 37 percent of liable companies are not US-headquartered, complicating the US framing of the levy as discriminatory.
The dispute is not new. Trump signed an executive order in February 2025 investigating digital services taxes across six countries, and the tax survived the UK-US trade deal struck in May 2025, with both sides agreeing to pursue a separate digital trade agreement instead.
The latest threat comes just ahead of a planned visit to the United States by King Charles, which some observers view as an opportunity to ease recent strains in the bilateral relationship.
A UK government spokesperson sought to de-escalate, saying the United States remains the country’s closest ally and that the two governments maintain a constructive relationship across many issues.
Business groups warned of the uncertainty the threat creates. William Bain of the British Chambers of Commerce said that while a current 10 percent tariff rate provides some relief compared with earlier threats of 15 percent, it remains far from clear whether a higher rate is still coming, making it extremely difficult for businesses to plan.
