US President Donald Trump has threatened new tariffs and export restrictions on countries that impose digital services taxes on US tech companies, escalating tensions with key allies just months after securing fresh trade deals.
In a Truth Social post, Trump blasted measures such as the UK’s digital services tax (DST), a 2% levy on revenues from companies like Google, Amazon, Apple and Meta, saying they were designed to “harm or discriminate against American technology” while sparing China’s biggest tech players. The UK’s DST generates roughly £800 million annually.
Trump warned: “Unless these discriminatory actions are removed, I will impose substantial additional tariffs on that country’s exports to the USA, and institute export restrictions on our highly protected technology and chips.”
The remarks put immediate pressure on the UK and EU, which both recently signed trade agreements with Washington. Several EU states, including France, Italy and Spain, maintain their own digital services taxes, while Brussels continues to push forward with its Digital Services Act, aimed at curbing Big Tech’s power.
The move echoes Trump’s February executive order, “Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties,” which laid the groundwork for tariff retaliation. In April, reports emerged that UK Prime Minister Keir Starmer had privately offered US tech firms a reduction in DST rates in an attempt to ease tensions.
Not all allies have stood firm: in June, Canada scrapped its DST following pressure from Washington, a decision Trump described as a “direct and blatant attack removed.”
Opposition leaders in Britain criticised the US president’s hardball tactics. Liberal Democrat leader Ed Davey said: “The prime minister must rule out giving in to Donald Trump’s bullying by watering down Britain’s digital services tax. Tech tycoons like Elon Musk rake in millions off our online data and couldn’t care less about keeping kids safe online. The last thing they need is a tax break.”
The standoff highlights a broader risk of renewed digital trade wars, even as Trump balances new tariff threats against China and ongoing geopolitical pressure in Europe.
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