US freezes $42B trade pact with UK over digital tax row
- Reference: 1765896008
- News link: https://www.theregister.co.uk/2025/12/16/us_uk_trade_deal/
- Source link:
In September, [1]the two English-speaking nations agreed the trade pact – with promised investment from Microsoft, Google, and other tech players – in the hope the UK would see a cash injection funding datacenters and other infrastructure.
Tech giants looking for ways to wriggle out of UK digital tax, watchdog warns [2]READ MORE
Under the alliance, the UK and US set up technology sharing agreements in the fields of AI, quantum computing, and nuclear research, Prime Minister Keir Starmer said.
"This Tech Prosperity Deal marks a generational step change in our relationship with the US, shaping the futures of millions of people on both sides of the Atlantic," he said in a statement.
It followed a trade treaty in May – the so-called Economic Prosperity Deal – in which the US wanted to increase food exports to the UK, some of which are currently held back by food safety standards. The US also wanted to see the UK water down online safety rules and DST.
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According to a report in the New York Times, US officials have become increasingly frustrated with a lack of progress on both fronts and the Tech Prosperity Deal is now on hold.
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A UK spokesperson said both sides agreed to further negotiations in January.
In the Autumn Budget last month, the UK government said it would continue to collect the DST, a 2 percent levy on some of the revenue accrued by search engines, social media, and online marketplaces.
[6]Trump's tariff‑shaped stick can't beat reality on US chip fabbing
[7]Brits to help foot power bill for datacenters under government AI plans
[8]Apple, Google tell Europe its Digital Markets Act isn't working for them – or consumers
[9]Europe hits Meta, Apple with €700M in fines for flouting DMA
The [10]UK collected just £800 million in Digital Services Tax (DST) from companies such as Amazon, Google, Meta, eBay, and TikTok in the most recent tax year, according to figures released with the Budget. It aims to collect £1.4 billion in 2030-31 and raise £7.3 billion over the next six years.
Some argue this is a trifling sum compared to the revenue generated by Big Tech companies in the UK. Amazon, for example, generated around £29 billion in UK sales for 2024. Google's total UK revenue from search alone is estimated at around £15 billion, gained from its 90 percent share in the search market. Meta's Facebook UK revenue is estimated at around £3.1 billion. It's worth noting that the tax does not apply to all of these companies' UK revenue.
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Campaigners TaxWatch argued the DST should be retained and the revenue collected between 2024 and 2029 is equivalent to the cost of training between 108,000 and 128,000 new nurses, or a quarter of the nursing workforce.
Caitlin Boswell, head of advocacy and policy, said: "The UK government should be crystal clear that it won't give tax breaks to Big Tech companies and concede to pressure from Donald Trump. The US President is trying to strong-arm countries into getting his way on taxes and tariffs, but the British public won't have it and neither should the Prime Minister." ®
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[1] https://www.theregister.com/2025/09/17/us_uk_trade_deal/
[2] https://www.theregister.com/2023/04/05/uk_digital_services_tax_review/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aUGQKznNocGx8l5NdhfFYgAAANA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKznNocGx8l5NdhfFYgAAANA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aUGQKznNocGx8l5NdhfFYgAAANA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/09/28/trump_1_1_chip_rule_too_late/
[7] https://www.theregister.com/2025/11/18/uk_ai_growth_zones/
[8] https://www.theregister.com/2025/09/26/google_apple_dma_review_submissions/
[9] https://www.theregister.com/2025/04/23/meta_apple_dma_ruling/
[10] https://www.theregister.com/2025/11/28/uk_digital_services_tax/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKznNocGx8l5NdhfFYgAAANA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
re: avoiding wasting UK power resources on AI data centres
If only that were even a remote possibility. The sad fact that our useless bunch of idiots in power (the Starmer crew) will not want to be seen to be a NIMBY and will give even more advatageous tax breaks for these huge grey elephants.
If I was in power (and thankfully I'm not) I'd be telling Doofus Trump that if he does not like our terms then we'd ban Google,Facebook, X and all the other US controlled social media platforms from operating in the UK.
The upside of such a ban would be less mental health issues for the NHS to handle.
Trump will always renege on any deal that he strikes. The other party is going to come out of any deal very badly (because the paedorange hasn’t learned that the only truly successful deals are those where both parties get to walk away with something that they want). So the only winning move is not to play. Put another way, the wisest thing to do is to tell him to F-Off up front.
45RPM,
No, there's no point in making things awkward by telling Trump to fuck off. You have to remember that Trump has the attention span of a five year-old and what he says isn't often what he actually wants. Mostly he just wants to look like he's doing deals all the time, and that he's a tough negotiator. So the idea is to give him lots of small deals and keep renegotiating those deals whenever he wants to, in order to stay engaged with him and get some of the things you want - and stop/delay him from doing some things you don't want. So long as you ignore the deals, as the mostly meaningless pieces of paper they are, and you just accept that US foreign and trade policy is essentially set to shuffle for the next 3 years, you can get some of what you want done.
Diplomacy is the process of dealing with governments of various shades of unpleasantness - and trying to get as much done as you can. Much of the important stuff is done quietly, so you don't even know how successful any government is being.
Trump's other secret is that he doesn't care. Being loud and obnoxious lets him look like a big player to his supporters. Even if it fails to get him much of what he wants, that could be achieved more quietly. And even when many of his "wins" end up driving almost exactly the opposite response to what he says he wants.
I think the key point is to remember the value of a $42B promise from Trump: $0. He does not have the slightest intention of paying up. Any concessions agreed just just mean new concessions will be demanded next month. Delaying until January is a good move. I would set the date to January 31. That is a Saturday so it gets two more days delay for free.
The current UK government will outlast the Orange sociopath, unless they decide to call an early election. So we can wait until an adult lives in the White house.
has been,
You are making the, rather large, assumption that Trump's replacement will be any better. There's still time for the Democrats to decide to try and fight fire with fire, and pick their own know-nothing populist arsehole.
Alternatively Trump's supporters may surprise us all, and not fall into vicious infighting after he's left the scene, and give us some kind of viable successor.
I still think the odds are against it, but the forces that brought Trump to power are still there.
and pick their own know-nothing populist arsehole.
He'll be well placed to deal with Nigel at number 10 by then...
"that Trump's replacement will be any better."
Jr.
Trumpo Jnr?
What about Just Dance Vance? He's next in line in the current term (until 20th Jan 2029).
Given Trump Seniors popularity ratings (going lower by the day) there is every chance that MAGA will disintegrate into outright civil war before the mid-terms let alone the next POTUS elections.
If that happens then the GOP is done for.
Unless Trump goes for four more years.
Tactical Option?
As a "tit-for-tat" approach worked reasonably well for China, maybe the response should be to announce an increase in the percentage levied.
Re: Tactical Option?
The tat comes from China. Where is the tit?
What?
Buy one of his shitty hats for £2
Give him £5. While he's being a div ask him for change for your £10, and he'll give you your £5 back not realising but then say you've changed your mind and ask for your £10 back & change for £20, he'll give two £10s back, your £10 and another £10 but say you've changed your mind again. You want your £20 back and change for £10
As we already know he's a fuck whit he won't notice he's given you £15 of his own money and will think he's done a great deal.
Or just tell him "Go fuck a duck you orange tango man cunt"
Re: Buy one of his shitty hats for £2
Trump is selling them for .... [drumroll] $47.00 each.
Does this mean avoiding wasting UK power resources on AI data centres? I'd call that a win.