WASHINGTON DC — President Donald Trump threatened to impose tariffs on the United Kingdom if it does not drop its digital services tax on U.S. social media firms. Trump said the tariff would exceed the amount the UK collects through the levy.

"We've been looking at it and we can meet that very easily by just putting a big tariff on the UK, so they better be careful," he said. "If they don't drop the tax, we'll probably put a big tariff on the UK."

He said the digital services tax targeted top companies in the world and that the U.S. would respond in kind. "The UK did it, a couple of other people did it. They think they're going to make an easy buck, that's why they've all taken advantage of our country," he said.

The digital services tax was introduced in 2020 and imposes a 2% levy on the revenues of several major U.S. tech companies. It applies to companies whose worldwide revenues from digital activities exceed £500 million, with more than £25 million of revenues from UK users. Several European countries, including France, Italy and Spain, have a digital services tax.

The UK–U.S. trade deal agreed in May 2025 did not change the UK's digital services tax. Trump suggested the terms of the trade agreement brokered last year can always be changed. In August 2025, he posted on Truth Social that unless discriminatory actions against American technology were removed, he would impose substantial additional tariffs on the offending nation's exports to the U.S.

U.S.–UK relations deteriorated after Sir Keir Starmer ruled out UK involvement in the conflict in the Middle East.