UK tells US to 'desist' from new retaliatory tariff threats for British goods in digital tax dispute

Tue 30 Mar 2021
Posted by: William Barns-Graham
Trade News

british chess

The prospect of new US tariffs on UK goods – including ceramics, kitchen tables and chess boards – has returned, with the Biden administration mulling retaliatory action over the UK’s recently introduced digital services tax.

Britain has introduced a 2% tax on the revenues derived by tech giants such as Google, Facebook and Amazon in the UK.


Only the largest firms with global revenues of at least £500m and UK revenues of more than £25m will need to pay the levy. By 2024, the Treasury has projected the tax could raise as much as £515m a year.

The US believes it will have a disproportionate impact on its companies and the Times reports that the White House is considering placing new tariffs on £236m worth of British goods in retaliation. 


The threat has come only weeks after the US suspended tariffs on other UK exports including scotch whisky in a bid to end the 16-year dispute it has had with major European nations over aviation subsidies.

Selected British companies could face tariffs of up to 25% in the dispute over digital taxes, the BBC reports.

International approach

US trade representative, Katherine Tai has said that the “US is committed to working with its trading partners to resolve its concerns with digital services taxes, and to addressing broader issues of international taxation”.

The US wants to reach an international consensus on digital taxes through an OECD-led global framework.

However, this forum has so far made little progress on the issue, prompting some countries – including the UK and France – to introduce their own taxes.


Trade Secretary Liz Truss has urged President Biden to “desist” from the new threat of duties, the FT reports

A UK government spokesman said Britain would “consider all options to defend UK interests and industry” if the US followed through on its threat of tariffs.

If a global digital tax is implemented, Britain has said it will repeal its own tax.