US Puts Tech Deal With UK on Hold

The United States government reportedly paused its technology deal with the United Kingdom.

The suspension of the “technology prosperity deal” comes amid rising frustration in Washington over the progress of trade discussions with the U.K., the Financial Times reported Monday (Dec. 15).

The deal, announced in September during President Donald Trump’s trip to the U.K., is designed to promote collaboration between the countries on artificial intelligence, nuclear energy and quantum computing, according to the report.

The U.S. suspended the deal last week, the report said, citing unnamed U.K. officials. The White House is lobbying for concessions from the U.K. on trade areas beyond the scope of the agreement, formed in response to tariffs on U.K. goods.

The U.S. became frustrated with the lack of willingness from the U.K. to deal with “non-tariff barriers,” such as rules and regulations on food and industrial goods, the report said, citing unnamed sources.

Although the U.K. agreed to allow 13,000 tons of U.S. beef to enter the country free of tariffs each year, the trade deal said the two sides would continue to work together to improve market access for more U.S. agricultural products, according to the report.

The U.S. has for years pushed the U.K. to recognize American food and agricultural product standards, although there were no specific commitments included in the deal, per the report.

Meanwhile, Trump has criticized the digital services tax imposed on tech companies by U.S. trading partners. However, one U.K. official denied that this tax, which affects American tech companies, was a serious issue, according to the report.

“The digital services tax is a red herring,” the official said, per the report. “We are down to negotiating some of the most difficult issues. Both sides expect this to take some time. But the dialogue remains open, active and constructive.”

The trade deal was accompanied by a $1.6 billion investment from financial companies, including PayPal, Bank of America and Citigroup, with commitments to create 1,800 jobs in England, Scotland and Northern Ireland.

“Strengthening ties with the U.S. boosts our economy, creates jobs and secures our role in global finance, delivering on our Plan for Change,” U.K. Business and Trade Secretary Peter Kyle said in September. “These investments reflect the strength of our enduring ‘golden corridor’ with one of our closest trading partners, ahead of the U.S. presidential state visit.”