U.K. Signals Willingness to Reconsider Digital Services Tax After Trump Tariff Threat

Prime Minister Andy Burnham visits the Met Office in Exeter on Aug.

14, 2026 —Press Association—AP The U.K. government has indicated its willingness to reconsider its digital services tax amid increasing pressure from the Trump Administration.

The concession came in response to an interview published Monday in which U.S.

Trade Representative Jamieson Greer told The Times that President Donald Trump’s threats to scrap a trade deal with Britain and impose a 100% tariff were “not a bluff.” When asked if the interview might lead Downing Street to change its stance on the tax, a government spokesperson told TIME, “We remain open to discussing U.S. concerns and working with partners internationally.” The digital services tax imposes a 2% levy on the revenues of “search engines, social media services, and online marketplaces which derive value from U.K. users.” Several other European countries , including Portugal, Spain, and Poland, have also implemented similar taxes.

Greer said Britain was using American companies as “piggy banks” and that he was “not going to tolerate that.” “We have very good relations with the U.K.

We’ve had very constructive relationships, we’d love to keep talking to them about this issue.

The President is quite serious about digital services taxes all over the world,” he said.

Read More: Why Trump Is Threatening to Impose a ‘Big Tariff’ on the U.K.

“This tax is about making sure that businesses pay their fair share of U.K. tax based on the value they derive from U.K. activities.

It is an interim measure, and we are still committed to removing it once a global solution is in place,” the spokesperson said, adding that both countries “share a strong trading relationship.” A White House official tells TIME that “the Administration continues to address digital services taxes and other tech issues with our trading partners.” Rising trade tensions between the U.S. and the U.K.

The U.K. and the U.S. agreed to a “groundbreaking” Tech Prosperity Deal in September 2025, which was expected to bring billions of dollars in investment from U.S. tech companies into the U.K. technology sector.

However, relations between the two countries have splintered since the onset of the Iran war.

"This is not Winston Churchill we're dealing with," Trump said of former British Prime Minister Keir Starmer at the height of tensions in March, as he accused the former U.K. leader of "ruining" relations.

Trump later warned the U.K. that he would implement a “ big tariff ” in April if the country did not drop its digital services tax on U.S. tech companies.