U.S. presidents of both parties have long taken issue with taxes imposed by foreign governments on large technology companies, arguing they discriminate against American firms like Amazon, Facebook, Meta and Google.
But the new agreement Trump hailed Thursday punts on that dispute, as well as several other particularly divisive issues like potential U.S. tariffs on pharmaceuticals.
The U.K.’s 2 percent digital service tax — which hits companies that earn more than $662.37 million globally and over $33.12 million from U.K. users — has been a sticking point in the talks. The tax was imposed in 2020 and targets the revenues of search engines, online marketplaces and social media services worldwide.
Pro-trade groups in the U.S. celebrated the framework agreement Trump and British Prime Minister Keir Starmer rolled out Thursday, but also expressed frustration that the digital services issue remains unresolved.
Jake Colvin, president of the National Foreign Trade Council, which represents major U.S. exporters, said in a statement that it would be “extremely disappointing if the U.K. doesn’t use this opportunity to address key trade irritants such as its digital services tax, which is a discriminatory policy that disproportionately targets U.S. companies.”
A British official, who was granted anonymity to brief reporters on the negotiations, acknowledged the Trump administration pressed the U.K. government to get rid of the DST or at least reduce or restructure it.
