Washington suspends tech deal with UK

Washington has reportedly suspended implementation of the United States-United Kingdom Technology Prosperity Deal announced in September, during President Donald Trump's state visit to Britain.

The move is being seen as a sign Trump has become frustrated with ongoing negotiations for a wider, full US-UK trade deal.

Trump and his UK counterpart, Prime Minister Keir Starmer, said three months ago that the Technology Prosperity Deal would lead to increased cooperation in areas including artificial intelligence, quantum computing, and nuclear energy.

But UK officials confirmed to the Financial Times newspaper this week the US suspended the deal last week, and that the move resulted from Washington seeking concessions in areas of trade that were not covered by the agreement.

One unnamed official told the paper the UK's digital services tax, which is having a major impact on US technology companies, was not the main cause for the apparent tension.

"The digital services tax is a red herring," the paper quoted the official as saying. "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."

Talks for a full trade deal have continued ever since the UK and the US reached a partial deal back in May that ensured UK exports are not subject to the most punitive of US import tariffs.

But The New York Times, which first reported the story, said there have been "broader disagreements" between the two sides on a full trade deal, with the US reportedly becoming frustrated with the UK's reluctance to remove so-called non-tariff barriers, such as the rules related to food production.

The US is understood to want more access to UK food markets, but the UK has been unwilling to fully open them, citing what it sees as lower standards of food production in the US.

A UK government spokesman responded by telling the FT: "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."

Back in September, the UK's prime minister said it amounted to "a generational stepchange in our relationship with the US" that could be worth 31 billion pounds ($41.6 billion) and that would shape "the futures of millions of people on both sides of the Atlantic".

As initial investments, including 22 billion pounds from Microsoft and 5 billion pounds from Google, were announced, Trump said it ensured the US and the UK would "dominate" the world of AI.

The deal also called for the creation of an AI "growth zone" in northeast England that promised up to 5,000 jobs, and collaboration on space exploration and satellite navigation.