Donald Trump has threatened to impose tariffs and export restrictions on countries whose taxes, legislation and regulations target US big tech companies such as Google, Meta, Amazon and Apple.
In a post on his social media platform, Truth Social, the US president said: “Digital taxes, legislation, rules or regulations are all designed to harm, or discriminate against, American technology.”
He said such measures – which include the UK’s digital services tax, which raises about £800m annually from global tech companies through a 2% levy on revenues – also “outrageously give a complete pass to China’s largest tech companies”.
Trump said: “As the president of the United States, I will stand up to countries that attack our incredible American tech companies. Unless these discriminatory actions are removed, I, as president of the United States, 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 threat puts pressure on the UK and the EU, which both struck recent trade agreements with the US. The EU has in place regulations to limit the power of big tech companies through the Digital Services Act, and several member states including France, Italy and Spain have digital services taxes in place.
US officials have criticised the UK’s digital services tax (DST), which was introduced in 2020 and was kept in place after the trade deal with the Trump administration that was reached in May.
Trump has complained about the impact that DSTs around the world are having on US companies. In February he issued an executive order titled Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties, threatening tariffs in retaliation.
In April it emerged that Keir Starmer had offered big US tech companies a reduction in the headline rate of the DST to placate Trump, while at the same time applying the levy to companies from other countries.
Trump said on Monday: “America, and American technology companies, are neither the ‘piggy bank’ nor the ‘doormat’ of the world any longer. Show respect to America and our amazing tech companies or consider the consequences.”
His warning comes a week after the US and the EU agreed in a joint statement that they would together “address unjustified trade barriers”. However, the EU said separately that it had not committed to alter any digital regulations.
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In June, Canada scrapped its digital services tax, which Trump had described as a “direct and blatant” attack, in an effort to smooth trade negotiations with its neighbour.
Ed Davey, the leader of the Liberal Democrats, said the UK government should not kowtow to Trump’s “bullying” tactics.
“The prime minister must rule out giving in to Donald Trump’s bullying by watering down Britain’s digital services tax,” Davey said. “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 way to respond to Trump’s destructive trade war is to work with our allies to stand up to him.”
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