Tech has also been caught in the crosshairs of the Trump administration’s trade policy.
Reports say that the United States is suspending the implementation of the “Tech Prosperity Deal,” a $41 billion deal that Trump struck with the United Kingdom earlier this year to boost artificial intelligence and quantum computing efforts. The agreement includes major investment commitments from American technology companies such as Microsoft, Google and Nvidia.
Unnamed officials confirmed to the Financial Times that the US had suspended the deal last week. What angered Washington, according to a New York Times report, were Britain’s strict food safety standards, cyber security laws and digital services tax.
Back when the US and the UK began trade talks earlier this year, British officials made two things clear: they would not budge on food standards or the Cybersecurity Act.
The United Kingdom generally has stricter food safety laws than the US, which US officials have long viewed as discriminatory as they translate into fewer US exports. British laws are particularly strict on treating cattle with growth hormones such as estradiol 17ß and testosterone or washing raw chicken in chlorinated water, both of which are common practices stateside. Although a trade deal agreed in May paved the way for more US beef exports, the UK has not budged on hormone-related safety requirements.
The second point of contention, the Internet Safety Act, pressures online platforms such as search engines and social media websites to protect users, especially children, from harmful content such as pornography or promoting self-harm, suicide or eating disorders, to name a few. The law also makes companies accountable for any child sexual abuse or exploitation that occurs on their premises. Large technology companies that fail to comply will face fines of up to 10% of their global turnover, and even criminal action against senior management in some cases. The legislation was viewed by some, including Republican Rep. Jim Jordan, as an experiment.
Another alleged influence on the deal is the United Kingdom’s Digital Services Tax, which levies a 2% tax on the revenue of major social media, search engine or online marketplace providers operating in the United Kingdom.
Some of America’s trading partners have similarly tough digital rules, including the European Union, which was also targeted by administration officials on Tuesday. The European Union has announced landmark technology regulations aimed at ensuring cyber security and competitive practices in the technology industry. Many of America’s largest technology companies have been fined for these actions, and Trump has deemed the fines “offshore fraud,” making combating them a key point of his trade strategy in the bloc.
On Tuesday, the US trade representative threatened regulatory measures against European companies in response, singling out Spotify, Siemens, Accenture, French AI company Mistral, and more.
“In the event that countermeasures are necessary, US law allows for financial inspections or restrictions on foreign services, among other actions,” the office of the US trade representative shared in the X post. “The United States will take the same approach as other countries that pursue an EU-style strategy in this area.”
