US announces fresh 25% tariffs on UK goods over digital tax dispute – but suspends them immediately

Thu 3 Jun 2021
Posted by: William Barns-Graham
Trade News

white house

The US has introduced new tariffs worth $2bn on European goods, including products from the UK, in response to an ongoing dispute over taxes for tech giants.

Washington immediately suspended the 25% import duties for six months, however, to allow for negotiations over digital taxation to continue.

Upping the ante

According to the Times, the move nonetheless marks a ratcheting up of pressure on the UK and other countries to conclude negotiations for a global tax framework.

Attempts in recent years to negotiate an international system through the OECD have faltered, leading to countries including the UK and France to introduce their own digital taxes.

The US, however, argues that these new levies have had a disproportionate impact on some of its biggest tech businesses – including Google, Amazon and Facebook.


In response, the US trade representative’s office yesterday approved tariffs on goods from the UK, Italy, Spain, Turkey, India and Austria after a ‘Section 301’ investigation concluded that their digital taxes discriminated against American companies.

The UK faces the highest tax liability of these countries, with about $887m (£626m) of exports to the US affected, including clothing, footwear and cosmetics. 

Global tax deal

According to the FT, G7 countries are trying to hammer out an update to the international tax regime.

The Biden administration has proposed giving advanced economies powers to raise levies on US tech companies and other large multinationals, while instituting a global minimum corporate tax.

The US originally pushed for a minimum global corporate tax rate of 21%, although it has recently said it would accept 15%.


Taxing tech giants fairly is Britain’s key demand in the wider negotiations on global tax, according to the Telegraph.

Following the US tariffs announcement, a Treasury spokesman said the UK’s digital services tax was “reasonable, proportionate and non-discriminatory”.