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The UK government is considering changes to its Digital Services Tax (DST) to prevent new US tariffs, Chancellor Rachel Reeves has suggested. Talks with the US are ongoing to maintain free and open trade while ensuring big tech firms pay their fair share in the UK.
The 2% DST, introduced in 2020, generates approximately £800 million annually from global tech giants like Amazon, Meta, and Alphabet. However, it may be adjusted in exchange for the US holding off on additional import tariffs targeting UK goods.
Critics, including the Liberal Democrats, argue that revising the tax could amount to a “handout to US tech billionaires” while essential services in the UK face budget cuts. The party has called for the DST rate to be tripled to 6% instead of being reduced.
US President Donald Trump has already imposed tariffs on UK goods and is expected to introduce more on April 2, dubbed “Tariff Day.” He argues that these tariffs will boost American industry, though businesses warn of supply chain disruptions.
Reeves emphasized that the UK does not have a trade surplus with the US and is working towards a fair resolution that avoids economic strain on British exporters.
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