US president Donald Trump has issued a stark warning to the UK, threatening substantial tariffs unless the nation abandons its digital services tax on American social media companies.
The levy, introduced in 2020, imposes a 2 per cent charge on the revenues of several major US tech firms – a move that has been criticised by both Mr Trump and his predecessor Joe Biden. It includes companies like Apple, Alphabet's Google and Meta.
Speaking from the Oval Office on Thursday, Mr 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 £500 million, with more than £25 million of the revenues from UK users.
Mr Trump argued the laws, which have long been a source of tension in UK-US relations, targeted the “top companies in the world”.
“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 or don’t like them, they’re American companies and the top companies in the world,” Mr Trump told reporters.
“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.
Trump made the remarks not long before a scheduled four-day state visit by King Charles and the Queen to the US, due to begin on Monday next week.
Mr Trump said he believes the monarch could help repair the Washington's relationship with the British. Ties between the two countries have been strained in recent months after Sir Keir Starmer ruled out British involvement in offensive operations against Iran.
“I know him well, I’ve known him for years,” Mr Trump said of King Charles during a BBC interview earlier. “He’s a brave man, and he’s a great man.”
Earlier this month, Mr Trump suggested the terms of the UK-US trade agreement brokered last year “can always be changed” in an interview with Sky News. That deal saw the UK receive what Trump described as the lowest possible tariff rate of 10 per cent, and a subsequent deal struck by Sir Keir Starmer and Mr Trump saw further carve-outs for Britain’s steel industry and car manufacturers.
This is not the first time Trump has proposed extra tariffs against the UK, having previously threatened Britain alongside Denmark and other European countries with 10 per cent tariffs over their opposition to an American takeover of Greenland.
However, the Supreme Court struck down President Donald Trump’s sweeping tariff agenda in February, dealing a seismic blow to the president’s key economic policy after months of chaos with America’s trading partners.
Speaking at Prime Minister’s Questions in the House of Commons earlier this month, Sir Keir said that “lot of pressure has been applied to me” over the Iran war.
He 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.
“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.”
A number of European countries, including France, Italy and Spain, have their own versions of the digital services tax.
In a post on Truth Social from August 2025, Mr 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.
Downing Street has been contacted for comment.
Additional reporting by agencies
