Trump’s tariff threat on UK digital services tax is no bluff, trade representative claims
Donald Trump’s threat of a 100 per cent import tariff on the UK due to Britain’s digital services tax on American social media firms is “not a bluff”, a US trade representative has stated, reports BritPanorama.
In June, the US president warned of imposing tariffs on European countries, including the UK, which taxes companies like Google and Apple with global digital revenues exceeding £500m.
The two per cent levy is considered a significant revenue stream for the Treasury, projected to raise £800m in 2024/25, up from £678m in 2023/24.
Mr Trump’s warning in June followed a similar assertion in May, when he indicated that substantial tariffs could be enacted unless the UK repealed its digital services tax on American technology firms.
Despite these warnings, the US administration has not yet taken further action. However, speaking to The Times, US trade representative Jamieson Greer asserted that the threats are “not a bluff”. When pressed about a deadline for compliance, he appeared to afford new Prime Minister Andy Burnham some time to respond.
He remarked, “I don’t set artificial timelines. All I know is the president is eager to enforce our trade policy, he’s eager to make sure our companies aren’t discriminated against.”
The UK’s global digital revenues tax, implemented in 2020, imposes a charge on the incomes of major US firms such as Apple, Alphabet’s Google, and Meta. This policy has faced criticism from both Mr Trump and his successor, Joe Biden.
The tensions stem from the UK-US trade deal, signed last year, which has come under increasing strain toward the end of Sir Keir Starmer’s premiership, with the US president criticising Sir Keir over decisions regarding North Sea drilling and migration.
In his latest threat in June, Mr Trump stated on his Truth Social platform that various European countries were considering the implementation of a digital services tax on American companies.
“Some of these countries are close to actually doing this,” he warned. “Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% tariff on any and all Goods sent to the United States of America.”
Despite the ongoing tensions, Mr Greer indicated to The Times that he enjoys a positive relationship with the UK’s business and trade minister Jonathan Reynolds. He stated, “We’ve had very constructive relationships and we’d love to keep talking to them about this issue. The president is quite serious about digital services taxes all over the world; we’ve had Canada roll back one, and we’ve had other countries decline to move forward.”
He continued, “We have a handful of countries in Europe and the UK who have these in place, so we’re interested in seeing those eliminated. We’re always happy to talk to our UK counterparts about the best way to do that.”
In July, the US imposed new tariffs on 60 countries, reducing tariffs on European Union states from 15 per cent to 10 per cent, while Britain’s 10 per cent tariff remained unchanged. This has prompted concerns from the head of the British Chambers of Commerce, who voiced fears that the UK may have lost its comparative advantage against the EU, as the UK exports more to the US than to any other single country.
