UK insists tech deal with US isn’t dead as Trump threatens penalties against European tech firms

Downing Street insists the $40bn Tech Prosperity Deal between the US and UK that is on hold is not permanently stalled. The BBC reported on Tuesday evening that the prime minister’s office claimed that the UK remains in “active conversations with US counterparts at all levels of government” about the wide-ranging deal for the technology industries in both countries to cooperate.

The agreement, previously billed as historic, was paused after the US accused the UK of failing to lower trade barriers, including a digital services tax on US tech companies and food safety rules that limit the export of some agricultural products. The New York Times first reported British confirmation that negotiations had stalled.

The White House and Downing Street did not immediately respond to a request for comment.

Tuesday’s developments come as relations between the US and the EU are likewise chilling. The Trump administration threatened European tech firms on Tuesday with economic penalties if the EU refused to roll back what it called “discriminatory actions”. The Office of the US Trade Representative accused the EU and some member states of “discriminatory and harassing lawsuits, taxes, fines and directives against U.S. services”.

The Trade Representative’s office said in a post on Twitter/X that these companies could face fees and restrictions on foreign services. The bureau singled out European companies, including Accenture, DHL, Spotify and Siemens as being able to “operate freely in the United States for decades, benefitting from access to our market and consumers on a level playing field.

“If the E.U. and E.U. Member States insist on continuing to restrict, limit, and deter the competitiveness of U.S. service providers through discriminatory means, the United States will have no choice but to begin using every tool at its disposal to counter these unreasonable measures,” the Office of the U.S. Trade Representative said on X.

Thomas Regnier, a spokesperson for the European Commission, responded by stressing that their rules “apply equally and fairly to all companies” operating in the region, according to the New York Times. “We will continue to enforce our rules fairly, and without discrimination,” he said.

The retaliation by the US follows a $140m fine slapped on Elon Musk’s X social media platform for violating transparency rules under the Digital Services Act. EU regulators took issue with the “deceptive design of X’s ‘blue checkmark’,” “lack of transparency of X’s ads repository” and “failure to provide researchers access to public data”. The EU has proven much more willing than the US to regulate, investigate and penalize tech giants, a point of contention with the Trump administration.