US pauses $40 bn tech deal with UK over digital rules, food standards

The United States has paused a $40 billion technology agreement with Britain, officials said, following concerns in Washington over London's approach to digital regulation and food standards. 

The Tech Prosperity Deal, covering artificial intelligence, quantum computing, and civil nuclear energy, was agreed during President Donald Trump's state visit to Britain in September. 

Britain hailed the visit as proof of close ties and Prime Minister Keir Starmer's ability to work with Trump on trade and technology.

Britain became the first country to agree in principle to lower some US tariffs in May, but implementation has been slow. Talks on sectors such as steel stalled, though the two sides agreed a framework pharmaceutical deal earlier this month. 

British officials confirmed on Tuesday that the US has paused implementation of the tech deal. The New York Times, which first reported the move, said US officials were frustrated by Britain's online safety rules, digital services tax, and food safety restrictions. 

BRITAIN SAYS IT IS COMMITTED TO WORKING WITH UNITED STATES   British ministers say the May tariff deal allowed higher US beef exports without compromising UK standards and insist digital regulations and tax will not be negotiated away. 

"Our special relationship with the US remains strong and the UK is firmly committed to ensuring the Tech Prosperity Deal delivers opportunity for hardworking people in both countries," a spokesperson for the UK government said. 

Under the Tech Prosperity Deal, Britain and the United States agreed to work together on quantum computers and artificial intelligence, while the likes of Microsoft, Google, Nvidia and OpenAI pledged to invest tens of billions of dollars in Britain.

The White House did not immediately respond to Reuters' request for comment. 

The US is Britain's largest trading partner, and its big tech companies have already invested billions of dollars in their UK operations. 

British Trade Secretary Peter Kyle visited the United States last week for talks with trade officials and tech firms.

"Kyle raised the importance of keeping up momentum on implementing all aspects of the UK-US deal," Kyle's office said in a readout after meeting US Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent. 

"Both sides agreed to continue further negotiations in January."