Tech is once again caught in the crosshairs of Trump administration trade policy.
Reports say that the United States is stalling the implementation of the “Tech Prosperity Deal,” a roughly $41 billion agreement Trump made with the United Kingdom earlier this year with the aim to develop joint artificial intelligence and quantum computing efforts. The deal included massive investment commitments from American tech giants like Microsoft, Google and Nvidia.
Unnamed officials confirmed to the Financial Times that the U.S. had suspended the deal last week. What’s been annoying Washington, according to a New York Times report, is Britain’s strict food safety standards, online safety rules and digital services tax.
Back when the U.S. and the UK first began trade talks earlier this year, British officials made two things very clear: they were not going to budge on food standards or the Online Safety Act.
The United Kingdom generally has stricter food safety regulations than the U.S., which American officials have long deemed to be discriminatory as they translate to fewer American imports. British regulations are especially strict around treating cattle with growth hormones like estradiol 17ß and testosterone or washing raw chicken in chlorinated water, both of which are common practices stateside. Though a trade deal agreed upon in May paved the way for more American beef exports, the UK did not budge on hormone-related safety requirements.
The second point of contention, Online Safety Act, pressures online platforms like search engines and social media websites to protect users, mostly children, from harmful content like porn or those promoting self-harm, suicide or eating disorders, to name a few. The law also holds companies accountable for any child sexual abuse or exploitation taking place on their platform. Big tech companies that fail to abide by the law stand to face fines up to 10% of their global revenue, and even criminal action against senior managers in some cases. The law has been deemed by some, including Republican Rep. Jim Jordan, as censorship.
Also allegedly weighing on the deal is the United Kingdom’s Digital Services Tax, which taxes 2% on the revenues of large social media, search engine or online marketplace providers that operate in the United Kingdom.
Other American trade partners have similarly strict digital regulations, including the European Union which was also targeted by administration officials on Tuesday. The European Union has heralded landmark tech regulations that aim to ensure online safety and competitive practices in the tech industry. Many American big tech companies have been hit with fines over these acts, and Trump has deemed the fines to be “overseas extortion,” making fighting them a central point of his trade strategy on the bloc.
On Tuesday, the U.S. trade representative threatened regulatory action on European companies in response, singling out Spotify, Siemens, Accenture, French AI company Mistral, and more.
“Should responsive measures be necessary, U.S. law permits the assessment of fees or restrictions on foreign services, among other actions,” the office of the U.S. trade representative shared in a post on X. “The United States will take a similar approach to other countries that pursue an EU-style strategy in this area.”
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