President Donald Trump threatened to slap a "big tariff" on the United Kingdom unless it eliminates its digital services tax, which primarily affects major U.S. tech firms.

Speaking in interviews with The Telegraph and reporters, Trump said, "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. If they don't drop the tax, we'll probably put a big tariff on the UK." He added that the tariff would be "more than what they're getting" from the tax and emphasized his obligation to protect American companies, calling them "the top companies in the world."

The digital services tax, enacted in 2020 as a temporary measure, levies 2% on revenues from search engines, social media platforms, and online marketplaces for companies with global digital revenues exceeding £500 million and more than £25 million from UK users. It primarily impacts U.S. giants like Alphabet's Google, Meta, and Apple. The tax generated £944 million ($1.3 billion) in the 2025-26 fiscal year, a 17% increase from £808 million the prior year, making it the world's largest such levy.

The UK government has defended the tax as "fair and proportionate," with a prime minister's spokesperson stating, "Our position on that is unchanged. It is a hugely important tax to make sure that those businesses continue to pay their share." Chancellor Rachel Reeves resisted U.S. pressure to scrap it entirely last November, opting instead for a review that upheld its continuation pending a global agreement.

Trump's remarks revive long-standing U.S. complaints that the DST discriminates against American firms while negotiations for an OECD global minimum tax have stalled. Similar tensions arose during the Biden administration, which also threatened tariffs. The tax persisted unchanged in a U.S.-UK trade deal signed in May 2025.

The threat comes amid strained transatlantic ties under UK Prime Minister Keir Starmer, including disputes over immigration, free speech concerns with the UK's Online Safety Act, and U.S. air bases. It precedes a four-day state visit by King Charles III and Queen Camilla to the U.S. starting Monday, which Trump suggested could help mend relations. He praised the King as a "brave man" and "great man," but criticized Starmer's leadership.

No specific tariff rate was detailed, but Trump indicated reciprocity "equal to or greater" than the DST's impact. The U.S. has issued similar warnings to other nations, like France, with digital taxes. UK exports to the U.S., its largest trading partner, could face significant pressure if tariffs materialize.