Sir Keir Starmer has maintained Britain's digital services tax on American social media firms, despite threats of retaliatory tariffs from President Donald Trump. The 2020 tax imposes a 2 per cent levy on the revenues of major US tech companies, which Downing Street defends as "fair and proportionate."
Trump's Warning
Mr Trump warned that the US could impose "big tariffs" on the UK if the tax is not dropped, stating they would be "equal or greater" than the revenue generated by the levy. The digital services tax, which applies to companies with significant UK user revenue, is projected to raise over £800 million in 2024–25.
Broader Tensions
These threats contribute to broader tensions in UK-US relations, following other disagreements such as reports of the US reviewing Britain's claim to the Falkland Islands. Downing Street has insisted it will not back down, emphasizing the tax's role in ensuring tech giants contribute fairly to the UK economy.
