Chancellor Rachel Reeves has indicated that the UK government is considering adjustments to the Digital Services Tax (DST) as part of efforts to avoid new tariffs being planned by US President Donald Trump. The 2% tax, introduced in 2020, targets large international tech companies such as Meta and Amazon and currently generates around £800 million a year for the UK Treasury.
Ongoing discussions between UK and US officials could see modifications to the DST in return for the US holding back on further import duties targeting British goods. Speaking on BBC One, Reeves said it was crucial to "get the balance right" and that the UK is committed to protecting exporters from potential tariff increases, while still ensuring that global companies contribute fairly to UK tax revenues.
President Trump, known for his aggressive trade policies, has already announced a wave of tariffs and is expected to reveal more on what some have dubbed “Tariff Day” on 2 April. He argues such measures support US jobs and manufacturing, though critics warn they disrupt global supply chains.
The Liberal Democrats have pushed back strongly on any changes to the DST, calling instead for the levy to be tripled. Treasury spokesperson Daisy Cooper warned that watering it down would risk the government’s moral credibility.
