Davey opposes UK tax changes for U.S. appeasement

Sir Ed Davey, leader of the Liberal Democrats, has cautioned against making changes to the UK's tax on tech companies to please former President Donald Trump. This warning comes as discussions intensify between the UK and the US regarding potential tariffs. Rumors suggest that Labour is considering altering or removing the digital services tax to avoid US tariffs that Trump plans to impose starting April 2. Chancellor Rachel Reeves did not dismiss the idea, indicating that talks are ongoing. Davey criticized Labour's approach, calling it a strategy of "appeasement." He argued that changing tax policy to satisfy Trump and business leaders like Elon Musk will not work. He noted that Trump had already imposed tariffs on British steel, indicating a tough stance. Business Secretary Jonathan Reynolds has been engaging with US trade officials this week. Meanwhile, Technology Secretary Peter Kyle is in the US promoting the UK as an investment hub for artificial intelligence. Reeves stated that the UK believes in the principle of paying taxes where businesses operate. She acknowledged that discussions regarding tariffs are complex and ongoing. Ambassador to the US, Lord Mandelson, confirmed that the digital services tax is part of the talks, suggesting various options are being considered, not just a complete removal of the tax. Davey also proposed introducing tariffs on Tesla vehicles if Trump escalates a trade conflict. He urged Labour leader Sir Keir Starmer to work with the EU and Canada to devise a united response to any trade war, similar to the alliances formed against Russia's actions.