Donald Trump has threatened to slap a 100% import tariff on any country that introduces a digital services tax on America’s technology giants, a move that throws fresh uncertainty over Britain’s own levy and the recently struck UK-US trade understanding.
Writing on his Truth Social platform, the US president claimed “numerous European countries” had been weighing up such a charge, with some close to bringing one in. He warned that the penalties would take effect immediately and would entirely “supersede” any existing bilateral trade agreements.
“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,” he wrote.
While the post is aimed squarely at nations planning the “imminent implementation” of new levies, the implications for the UK are far from clear. London has had a digital services tax on the books since 2020, well before the latest wave of European proposals that appear to have prompted the president’s intervention.
Britain’s 2% Digital Services Tax applies to major search engines, social media platforms and online marketplaces with worldwide revenues from their digital businesses topping £500 million and total UK revenues above £25 million. It is calculated only on the revenue tied to British users.
The charge bites on some of the largest names in American business, among them Apple, Google, Meta and Amazon. According to the Treasury, it raised more than £800 million in 2024-25, up from £678 million the year before, making it a useful and growing source of revenue for the Exchequer.
The tax has long been a source of irritation in Washington. Back in April, Trump said the UK faced “a big tariff” for what he characterised as targeting major American companies. “They think they’re going to make an easy buck, that’s why they’ve all taken advantage of our country,” he said at the time.
The Department for Business and Trade and the Treasury have been approached for comment.
The threat lands just days after the US and EU finalised a new trade deal, and the timing is unlikely to be coincidental. Michael Damianos, minister of energy, commerce and industry for the Republic of Cyprus, said the bloc “can respond swiftly and proportionately when the deal is not respected or its interests are at stake”.
France, Italy and Spain each levy a 3% digital services tax on large companies operating within their borders, and several other EU member states have implemented or proposed similar measures, according to the Tax Foundation, a non-profit body focused on tax policy. Amazon earlier this year raised its fees on sellers, citing precisely these taxes.
The latest salvo fits a now-familiar pattern. Trump has sought to impose sweeping tariffs on dozens of trading partners since returning to office in 2025, with mixed success. The US Supreme Court in February struck down his earlier attempt to apply a blanket global tariff of 10%.
That has not slowed the broader campaign. Washington recently announced fresh tariffs of between 10% and 12.5% on dozens of countries accounting for almost all of its imports, on the grounds that those nations are not doing enough to tackle forced labour, a move that has already caught UK exporters in its net.
For British firms, the stakes are considerable. US tariffs on UK goods have already climbed sharply over the past year, and a 100% duty triggered by the digital services tax would dwarf anything seen so far. With the ink barely dry on the UK-US trade understanding, ministers now face an uncomfortable choice between defending a levy worth the better part of £1 billion a year and shielding exporters from a potential tariff shock.