US President Donald Trump has threatened to impose a 100% tariff on imports from any country that introduces a digital services tax targeting American technology companies, raising fresh questions over the future of Britain’s existing levy and the recently agreed UK-US trade understanding.
In a post on his Truth Social platform, Trump said several European countries were considering new digital taxes on major US technology firms and warned that any nation implementing such measures would face immediate trade penalties.
“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,” Trump wrote, adding that the proposed tariffs would override any existing bilateral trade agreements.
Although Trump’s comments appeared to focus on countries preparing to introduce new digital taxes, they have also drawn attention to the United Kingdom, which has had a Digital Services Tax in place since 2020.
The UK’s 2% tax applies to large search engines, social media platforms and online marketplaces with global digital revenues exceeding £500 million and UK revenues above £25 million. The tax is charged only on revenue linked to UK users.
Major US technology companies, including Apple, Google, Meta and Amazon, fall within the scope of the measure. According to the UK Treasury, the tax generated more than £800 million during the 2024-25 financial year, an increase from £678 million the previous year, making it a growing source of government revenue.
Washington has long opposed digital services taxes, arguing they unfairly target American companies. Earlier this year, Trump warned that Britain could face significant tariffs because of the levy, accusing foreign governments of attempting to profit from successful US businesses.
The latest warning comes shortly after the United States and the European Union concluded a new trade agreement, adding uncertainty to relations with countries that continue to impose digital taxes. Several European nations, including France, Italy and Spain, already operate 3% digital services taxes on large technology firms, while other countries are considering similar measures.
Trump has continued to pursue an aggressive trade agenda since returning to office in 2025, introducing new tariffs on a wide range of imports from dozens of countries. While some of his earlier tariff policies have faced legal challenges, his administration has continued to expand trade restrictions on various grounds.
For the UK, the latest threat presents a difficult balancing act. The government must weigh the benefits of retaining a tax that generates substantial revenue against the possibility of steep US tariffs that could significantly affect British exports if Washington follows through on the proposal.
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