The threat by Donald Trump to impose a 100 percent import tariff on goods from the United Kingdom over the British tax on digital services for American social‑media companies is “not a bluff,” the US trade representative said.
In June, the US president warned about imposing tariffs on European countries, including the United Kingdom, which taxes companies such as Google and Apple, which generate more than £500 million in global digital revenue.
This 2 percent levy is an important source of revenue for the British Treasury. In the 2024/25 fiscal year it brought in £800 million, up from £678 million in 2023/24.
Despite these threats, the US administration has not yet taken any retaliatory measures. In June, Trump also issued a similar warning, saying that significant tariffs could be imposed if the United Kingdom does not abolish the digital services tax for American technology companies.
Meanwhile, in a comment to The Times, US Trade Representative Jamieson Greer said that these warnings are “not a bluff.” When asked about a deadline, he appeared to give the new Prime Minister Andy Burnham some time to respond.
“I am not setting artificial deadlines. I only know that the president is eager to implement our trade policy and ensure that our companies are not discriminated against,” Greer said.
The British tax on global digital revenues, introduced in 2020, applies to the revenues of large American firms such as Apple, Google (Alphabet) and Meta. The tax has been criticised by both Donald Trump and US President Joe Biden.
The issue has intensified amid growing tension over the trade agreement between the United Kingdom and the United States, signed last year at the end of the premiership of Keir Starmer. At that time, the US president criticised Starmer for decisions on North Sea drilling and migration.
Trump’s warning on social media
In his latest threat in June, Donald Trump wrote on his platform Truth Social: “Numerous European countries are discussing the imminent introduction of a digital services tax for American companies. Some of these countries are close to introducing such a tax. Let this statement be a warning: any country that introduces such a tax will immediately face a 100 percent tariff on any goods exported to the United States of America.”
Despite the tension between the two governments on this issue, Jamieson Greer told The Times that he has good relations with the UK’s Business and Trade Minister Jonathan Reynolds.
“We have had very constructive relations and we would like to continue discussing this issue with them. The president takes the issue of digital services taxes around the world quite seriously; Canada has abolished one such tax, other countries have refrained from introducing it. We have several countries in Europe and the United Kingdom where such taxes are in effect, so we are interested in their abolition. We are always happy to discuss with our British colleagues the best way to do this,” Greer noted.
Changes in US tariff policy
In July, the United States introduced new tariffs for 60 countries. For European Union members, tariffs were reduced from 15 to 10 percent, while the 10 percent tariff on the United Kingdom remained unchanged. As a result, the base tariffs for the United Kingdom and the EU were equalised at 10 percent.
The head of the British Chambers of Commerce warned that the United Kingdom has lost its comparative advantage over the EU, as it now exports more goods to the United States than to any other single market.
Source: The Independent UK
