Trump threatens tariffs on UK over digital services tax

U.S. President Donald Trump has threatened to impose tariffs on the United Kingdom if it does not scrap its digital services tax (DST), escalating trade tensions between the two allies.

Speaking to The Telegraph, Trump warned that Washington could retaliate if London maintains the levy, which U.S. officials think unfairly targets American technology companies.

“I don’t like it when they target American companies, because basically, you’re talking about our great American companies, whether we like those companies that don’t like them, they’re American companies and the top companies in the world,”  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'd better be careful. If they don’t drop the tax, we’ll probably put a big tariff on the UK.”

The UK’s DST imposes a 2% charge on revenues generated by large digital firms, including social media platforms, search engines and online marketplaces. Companies such as Apple, Google and Meta are among those affected.

The tax has become an increasingly important source of revenue for the British government. HM Revenue and Customs reported that DST receipts reached £944 million ($1.3 billion) in the 2025–26 fiscal year, a 17% increase from the previous year. Forecasts suggest it could generate £1.4 billion annually by 2030.

The dispute comes ahead of a planned state visit by the King and Queen to the United States. Trump said the monarch could help improve strained relations between the two countries, describing him as “a brave man, and he’s a great man.”

However, Trump was more critical of Prime Minister Keir Starmer, suggesting he could only “recover” if he changes course on immigration and energy policy.

The UK government has resisted pressure to drop the tax, arguing it ensures digital companies contribute fairly to the economy. The measure is intended to remain in place until a global agreement on digital taxation is reached—an initiative the Trump administration has opposed.

By Tamilla Hasanova