CAMPAIGNERS demanded today the government “hold firm” against Donald Trump’s threats and maintain its digital service tax.

Tax Justice UK urged Prime Minister Keir Starmer not to give into the US president’s “attempts to bully his way to yet another tax break for his billionaire buddies.”

On Thursday, Mr Trump threatened “a big tariff” on British imports if the government does not give in to demands to drop the digital services tax on US social media companies.

He told reporters in the Oval Office: “We’ve been looking at it and we can meet that very easily by just putting a big tariff on the UK, so they better be careful.

“If they don’t drop the tax, we’ll probably put a big tariff on the UK.”

Several US tech firms were hit with a 2 per cent levy after the introduction of the tax in 2020. It targeted those which have digital activities surpassing £500 million, with more than £25m of the revenue from UK users.

Tax Justice UK director Faiza Shaheen said British tax policies “must reflect the interests of the British public, not maximise the already enormous profits of American corporations.”

She told the Morning Star: “The government should hold firm. Our public services are already falling apart, partly due to the extraction of profit through rip-off contracts with companies like Palantir, Amazon, and Google.

“While everyday people and small businesses are struggling, these companies continue to make eye-watering sums from their business in Britain. They should be being asked to pay more, not less.”