US President Donald Trump has threatened to impose a 100% tariff on British imports if the UK maintains its digital services tax on major American technology companies, escalating tensions over trade and taxation.
Trump warned that any country introducing or retaining a digital tax targeting US firms would face immediate retaliatory measures, including tariffs that would override existing trade agreements.
The UK currently levies a 2% digital services tax on companies generating significant revenues from online activities. The measure applies to businesses with global digital revenues exceeding £500 million, provided more than £25 million of that income is derived from UK users.
According to a Treasury review published in 2025, the tax generated more than £800 million during the 2024-25 financial year, up from £678 million the previous year.
Writing on his Truth Social platform, Trump criticised European countries considering or implementing digital taxes on American companies and issued a stark warning over potential consequences.
He stated that countries imposing such taxes would be met with a 100% tariff on all goods exported to the United States. Trump added that these measures would take precedence over any trade deals already signed, agreed or under negotiation.
The latest remarks revive a long-running dispute between Washington and several European governments over digital taxation. US officials have consistently argued that such levies unfairly target American technology giants, while supporters of the taxes say they are necessary to ensure multinational firms contribute fairly in countries where they generate substantial revenues.
Trump had previously raised the possibility of trade action against Britain unless it scrapped the digital services tax, but his latest comments mark one of the strongest warnings issued on the issue.
Any move to impose sweeping tariffs on UK exports would likely intensify trade tensions between London and Washington and could place pressure on the British government as it seeks to balance domestic tax policies with maintaining strong economic ties with the United States.