UK Retains Digital Services Tax Despite New US Trade Deal

The United Kingdom has confirmed it will maintain its 2% digital services tax (DST) on large U.S. tech firms such as Amazon, Google, and Meta, despite a newly agreed trade deal with the United States. The tax, introduced in 2020 to address tax loopholes for major online businesses operating without a physical UK presence, has faced strong criticism from U.S. leaders including former President Donald Trump, who labeled such levies as unfair and designed to "plunder American companies." While the DST remains unchanged, the trade agreement focuses on reducing bureaucratic obstacles for British exporters entering the U.S. market, aiming to stimulate economic growth. Both countries have also pledged to pursue a digital trade framework potentially fostering deeper technology collaboration, including in sectors like quantum computing. The UK government insists the DST retention supports domestic economic interests, whereas the U.S. prioritizes easing trade barriers and exploring broader tech partnerships. This balanced approach underscores ongoing tensions over digital taxation while emphasizing cooperative prospects within the wider UK-U.S. trade relationship.