Downing Street says the $40bn U.S.–UK Tech Prosperity Deal, while paused, is not permanently dead and officials are in active talks with U.S. counterparts. The U.S. paused negotiations over UK trade measures, including a digital services tax and food-safety rules. Separately, the U.S. Trade Representative warned European firms of potential penalties over what it calls discriminatory actions by the EU. The move follows a €140m fine on X under the EU’s Digital Services Act for transparency breaches.
UK Insists $40bn Tech Deal Isn’t Dead As U.S. Threatens Penalties For European Firms
Trump and British prime minister Keir Starmer at Chequers, the PM’s country residence, in September.Photograph: Kevin Lamarque/Reuters
Downing Street says the $40bn Tech Prosperity Deal between the United Kingdom and the United States, currently paused, is not permanently shelved and that officials remain in active talks with U.S. counterparts.
Deal Paused Over Trade Frictions
The agreement — billed earlier as a landmark pact to boost cooperation across the two countries' technology sectors — was put on hold after Washington said the UK has not done enough to lower trade barriers. U.S. complaints cited measures including a digital services tax on American tech companies and UK food safety rules that restrict exports of some agricultural products. The New York Times first reported that British officials confirmed negotiations had stalled.
“We look forward to resuming work on this partnership as quickly as possible,” a Downing Street spokesperson said, adding that the UK is committed to maintaining a close bond with the United States and working together to help shape emerging technologies.
The White House did not immediately respond to requests for comment.
Rising Tensions With The EU
The pause in U.S.–UK talks comes amid escalating friction between the U.S. administration and the European Union. On Tuesday the Office of the U.S. Trade Representative (USTR) warned that European tech firms could face economic penalties if the EU did not roll back what the USTR described as discriminatory actions against U.S. services.
The USTR said in a post on X that some EU member states have pursued “discriminatory and harassing lawsuits, taxes, fines and directives against U.S. services,” and that, if such measures continue, the United States will use the tools at its disposal to counter them. The statement singled out firms including Accenture, DHL, Spotify and Siemens as examples of companies that have long operated in the U.S. market.
European Response
Thomas Regnier, a spokesperson for the European Commission, told reporters that EU rules are applied equally to all companies and would continue to be enforced fairly and without discrimination. The New York Times reported his comments.
Context: Digital Services Act And The X Fine
The U.S. warnings followed recent enforcement actions in Europe, notably a €140m fine (reported as about $140m) imposed on Elon Musk’s X platform for breaches of transparency obligations under the EU’s Digital Services Act. Regulators cited problems including the "deceptive design" of X’s verification system, insufficient transparency in its ads repository, and a failure to provide researchers with access to public data.
These developments underscore a wider geopolitical tension over how to regulate big tech: the EU has been more willing than the U.S. to investigate and penalize major platforms, a recurring point of contention with the current U.S. administration.
What’s next: Downing Street says talks with U.S. officials are ongoing; meanwhile, Washington’s threats to EU firms could prompt further negotiations or retaliatory measures if the parties do not reach common ground.
