US President Donald Trump on Thursday threatened to impose ‘big tariffs’ on the United Kingdom if the country does not drop the Digital Service Tax (DST).

US President Donald Trump on Thursday threatened to impose “big tariffs” on the United Kingdom if the country does not drop the Digital Service Tax (DST). While speaking to The Telegraph, Trump said that he would “put a big tariff on the UK” if it did not drop its tax.

He maintained that the tax unfairly targets US tech companies, after the Treasury revealed it had collected millions last year. “I don’t like it when they target American companies, because basically, you’re talking about our great American companies, whether we like those companies that don’t like them, they’re American companies and the top companies in the world,” Trump told the British news outlet.

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“We’ve been looking at it, and we can meet that very easily by just putting a big tariff on the UK. So they’d better be careful. If they don’t drop the tax, we’ll probably put a big tariff on the UK,” he said. The American leader viewed the tax as an unfair targeting of American companies such as Apple, Google and Meta by placing a 2 per cent charge on revenue on social media, search engines and online marketplaces.

Interestingly, Trump’s warning came right ahead of King Charles III and Queen Camilla’s visit to the US next week. On Wednesday, Trump said that the monarch could “absolutely” repair the special relationship between the two countries, which has become strained in recent months.

Why it matters

It is pertinent to note that the Digital Service Tax (DST) also applies to the UK revenues of large search engines, online marketplaces and social networks and has become increasingly important to the Exchequer amid the growth of big tech companies.

Official forecasts suggest that the taxes could raise £1.4 billion a year by 2030, up from £380 million when first introduced four years ago. On Thursday, the UK’s HM Revenue and Customs published its annual tax receipts for 2025-26, including the total amount made payable to DST, which totalled $1.3 billion.

It represents an increase of 17 per cent from the £808m (around $1.1bn) reported in 2024-25 and nearly 10 per cent more than the $866m raised by the digital services tax in France in 2024. Hence, the figures suggest that the UK DST appears to remain the largest in the world.

When asked what kind of tariffs the United Kingdom can expect, Trump said: “More than what they’re getting.” Refusing to drop the tax, which is a key revenue driver for the Treasury, could further sour UK Prime Minister Keir Starmer’s relationship with the president.

Trump is ready for the King’s visit

Meanwhile, the American president noted ahead of King’s visit on Monday that the occasion could help improve the ties between the two nations. “I know him well, I’ve known him for years,” Trump said during a phone interview with the BBC before the King’s four-day state visit, which begins on Monday. “He’s a brave man, and he’s a great man.”

The president, however, appeared to be more muted when discussing Starmer, saying the Prime Minister could only “recover” if he changed course on immigration. “If he opened the North Sea and if his immigration policies became strong, which right now they’re not, he can recover, but if he doesn’t, I don’t think he has a chance,” Trump said.

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It is pertinent to note that the US officials have long complained about the tax, which they view as unfairly targeting American tech companies. Apart from this, they also see the Online Safety Act 2023 as a threat to free speech. Back in November, Rachel Reeves, the Chancellor, resisted pressure from Washington to drop it entirely. Hence, it would be interesting to see how the UK would react this time around.

First Published:
April 24, 2026, 06:29 IST

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