Trump threatens UK tariffs; markets wobble

President Donald Trump said on April 24 that he would “probably put a big tariff on the UK” if Britain does not scrap its digital services tax. (time.com) (cnbc.com) Trump made the threat while attacking what he called a UK tax aimed at American companies, and he singled out Prime Minister Keir Starmer’s government as the party that would have to change course. (time.com) (telegraph.co.uk) Britain’s digital services tax was introduced in 2020 and charges 2% on revenue tied to UK users for large search engines, social media platforms and online marketplaces. Companies in scope generally need more than £500 million in global digital-services revenue and more than £25 million linked to UK users. (cnbc.com) (news.sky.com) The tax has become a real line item for the Treasury. A UK government review published in late 2025 said it raised about £800 million in 2024-25, and later reporting on April 24 said receipts reached £944 million in 2025-26. (gov.uk) (euronews.com) Trump’s threat reopens a fight that trade negotiators had not settled. CNBC reported that the UK-US trade deal agreed in May 2025 left the digital services tax in place, even after pressure from Washington. (cnbc.com) The market backdrop was already shaky on April 24. London stocks fell as oil stayed above $100 a barrel and investors tracked the Iran crisis, with one live market report putting the FTSE 100 down 78 points to 10,379. (proactiveinvestors.co.uk) (invezz.com) Oil was part of the pressure. Reports on April 24 showed Brent crude around $105 to $106 a barrel after a multi-day rally tied to fears over disruption around Iran and the Strait of Hormuz. (cnbc.com) (ndtvprofit.com) The UK government’s public position before Trump’s latest warning was that the tax is an interim measure, not a permanent settlement. A Treasury review said Britain still backs an international rewrite of digital-tax rules and would remove the levy once a workable global system is in place. (gov.uk) That leaves Starmer’s government balancing two concrete interests: keeping a tax that now raises close to £1 billion a year, and avoiding a new tariff fight with Britain’s biggest single-country trading partner. (gov.uk) (time.com) For now, Trump has issued a threat, not a tariff order. The next test is whether London offers concessions on the tax or Washington turns the warning into a formal trade demand. (time.com) (reuters.com)