The US will not negotiate a free trade deal with the UK unless a new digital services tax is dropped, according to a newspaper report – Source: Sky News

The measure, which was proposed in 2018 by then chancellor Philip Hammond in response to fears that technology giants were not paying their fair share of tax, is due to come into effect in April next year.

But US President Donald Trump’s administration is demanding that it be ditched, The Daily Telegraph reported.

The threat had been “communicated to the UK government at multiple levels”, the newspaper said, quoting a source as saying: “The message was, ‘if you go ahead and introduce this tax, we will not begin free trade negotiations with you’.”