U.S. and UK Announce $420 Billion Tech Cooperation, Shift from Tariff Threats

On September 18, the United States and the United Kingdom announced a significant technological cooperation framework worth 420 billion dollars. This move marked a shift from the previous stance of the United States, which had been characterized by threats of tariffs. The agreement was unveiled at Windsor Castle by U.S. President Trump and a group of top executives from leading American technology companies.

Among the attendees at the subsequent state banquet in the UK were the CEOs of Microsoft, OpenAI, and NVIDIA, along with other leaders from some of the world's wealthiest companies. The tech agreement between the two nations included new investments by NVIDIA and Microsoft in the UK, as well as the establishment of an artificial intelligence growth zone in the northeast of England.

While the scale of these collaborations may seem modest compared to the multi-billion-dollar investments typically seen in the artificial intelligence industry, the level of attention from the United States was notably higher than market expectations. This has sparked speculation about the underlying messages that the U.S. and Silicon Valley might be conveying through this agreement.

A representative from the U.S. tech industry revealed that the Trump administration might employ a carrot-and-stick approach during negotiations with the UK on trade, tariffs, and taxation. The recent visit and new tech investments are seen as the "carrot" in this strategy.

The representative further noted that while discussions about various companies' investments in the UK are ongoing, the broader goal of the U.S. tech industry is to see the UK reduce its digital services tax and eliminate related trade barriers.

The U.S. tech industry has long been dissatisfied with the UK's digital tax rules. The digital tax in the UK is a service tax levied on the income from digital services such as search and advertising, with a rate of 2%. According to a report by the UK's National Audit Office, the digital services tax generated nearly 360 million pounds in its first year from major U.S. tech giants including Amazon, Google, and Apple.

The representative from the U.S. tech industry also highlighted that the digital tax, which is based on revenue rather than profit, could hinder innovation by U.S. AI companies. These companies generate substantial revenue but may not be profitable.

In addition to the digital tax, U.S. tech companies are also hoping that the UK will repeal the Network Security Law and the Anti-Monopoly Law, which they believe unfairly target American companies.

The U.S. tech industry has a larger objective: to facilitate a comprehensive digital trade agreement between the U.S. and the UK. The representative emphasized that in these challenging times, it is crucial for the two countries to establish a clear, long-term framework. This framework would serve as a solid foundation for future investments by all tech companies.