The United Kingdom is preparing to respond to the series of tariffs President Donald Trump has introduced since taking office. New taxes on everything from pure-bred horses to bourbon are on the table, but the Labour government seems more interested in a conciliatory approach, and it’s considering sacrificing a popular tax on American tech companies in order to sweeten the deal.
Prime Minister Keir Starmer has confirmed that trade talks have included “questions about the appropriate way to tax digital services,†as The Guardian reports that UK negotiators have offered to water down the Digital Services Tax (DST) in exchange for lower tariffs, following earlier reports that UK negotiators were willing to scrap the tax entirely. It’s a move that could save Silicon Valley tech giants hundreds of billions, while mounting pressure on other governments worldwide to follow suit. In the UK, it would signal capitulation to American big tech — but pragmatically, some think it might not be a huge loss.
Instead of taxing profits — which are easy to obfuscate or assign to tax havens — the DST taxes tech companies at a rate of 2 percent based on the revenue generated from UK users …
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