US threatens UK with no post-Brexit free trade deal unless tax on tech giants scrapped

US threatens UK with no post-Brexit free trade deal unless tax on tech giants scrapped
  • Clock-gray 12:15
  • calendar-gray 03 August 2019

The White House is demanding the UK government drop the so-called digital services tax, threatening London will get no free trade deal, The Telegraph reports, citing its sources. According to the British outlet, “the threat has been communicated to the UK Government ‘at multiple levels’”. Apart from discreet warnings from the Trump administration, key Congressmen have publically signalled they could block negotiations about the free trade deal, APA reports citing Sputnik.

This July the British government revealed plans to introduce a 2% tax starting in April 2020 on the revenues of companies like Amazon, Google and Facebook, making money on UK users. In response, the Trump administration is reportedly ready to ditch an agreement that new Prime Minister Boris Johnson is relying on with a no-deal Brexit looming.

Top Democrat on the Senate finance committee Ron Wyden earlier told Bloomberg News he’d warned British officials that introducing the tax, set to be adopted this autumn, means no post-Brexit trade deal.

“I met with the UK officials earlier, and said ‘You expect a trade agreement with the United States and the UK It will not happen with your digital services tax. Period. Full stop’”, Wyden stated.

Republican Representative Kevin Brady echoed his statement, noting the tax would impair the free-trade deal negotiations, saying: “It’s not the way to start this discussion”.

As Donald Trump himself stated, he discussed the trade agreement during his first call to congratulate Boris Johnson, who was elected the Conservative Party leader and prime minister this July.

“We’re working already on a trade agreement. And I think it’ll be a very substantial trade agreement, you know we can do with the UK, we can do three to four times, we were actually impeded by their relationship with the European Union”, the US president said.

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