Trump Threatens UK With Steep Tariffs Over £5bn Digital Tax

• President Trump warns of major tariffs if UK keeps digital tax on US tech giants
• UK government stands firm amid economic strain and faltering trade talks

On April 24, 2026 (UTC), CNBC reported that U.S. President Donald Trump threatened to impose substantial tariffs on the United Kingdom unless it scrapped its 2% digital services tax on major American technology companies, a levy estimated to raise between £4.4 billion and £5.2 billion. Trump argued that the tax unfairly targets U.S. firms and stated, “If they don’t drop the tax, we’ll probably put a big tariff on the U.K.,” declining to provide specific figures on the potential tariffs.

The UK government quickly responded, making clear it intends to keep the tax. Officials described the measure as fair and proportionate, intended to make multinational tech firms pay their share of taxes in the UK. The digital services tax, which came into effect in 2020, applies to businesses earning over £500 million globally and at least £25 million in revenue from UK users alone.

Efforts to reach a global agreement on digital taxation through the OECD have stalled, forcing the UK’s digital tax to remain in place longer than first planned, despite earlier commitments to replace it. The prolonged negotiations mean the UK continues to apply the tax as international pressure grows.

The dispute escalates at a difficult moment for the UK, as the country faces rising inflation and a downgraded growth outlook from the IMF. MPs increasingly question the value of post-Brexit trade ties with the US as the threat of tariffs, and ongoing regulatory friction place further strain on relations.

Trump’s threat to impose tariffs has intensified economic tensions between the US and UK, adding to the pressure on the British government as it grapples with domestic economic challenges.