The Trump administration has cancelled a $41 billion technology deal with the UK, cutting straight into one of the biggest joint projects on AI, quantum computing, and nuclear energy the two governments had lined up.
Washington suspended the plan after weeks of irritation over slow movement in wider trade talks.
British officials confirmed the freeze and said it happened last week.
The deal had been announced in September during Trump’s state visit, and now it sits on ice because both sides cannot get through basic trade fights.
Trade talks have been dragging since May, when both countries agreed to a plan that softened the tariffs Trump placed on British goods. People involved allegedly said the US team was running out of patience with the UK’s refusal to respond to “non-tariff barriers.”
These barriers sit inside rules and regulations for food and industrial goods, and US officials want them changed.
The UK did allow 13,000 tonnes of US beef into the country each year without tariffs, but even that came with a clear note in the agreement saying both sides would still work on giving more access to American farm products.
The US has been asking the UK to accept American food standards, but no promise was made inside the deal.
US targets UK trade barriers and taxes
Trump has complained before about digital services taxes that target US tech companies. The UK is one of the countries with such a tax. But one UK official said the issue was being blown out of proportion and argued it was not blocking the deal.
“The digital services tax is a red herring,” the official said. The same official added, “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.”
Even while the tech deal was collapsing, UK business secretary Peter Kyle and science secretary Liz Kendall were already in the US meeting with tech leaders.
Their trip had been planned earlier and was not changed after Washington suspended the agreement.
British officials described the US team as “very tough negotiators,” but insisted the talks are not dead. One of them put it simply: “We are pretty sure we can get this back on track.”
The UK government tried to calm nerves by saying the relationship with Washington remains strong. A spokesman said, “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.”
The statement did not gloss over the suspension, but it tried to keep the tone steady while both sides argue over growth, control, and standards.
The freeze on the tech pact comes only weeks after a different deal between the countries moved forward.
Earlier this month, the UK agreed to raise NHS spending on medicines after the US decided to remove tariffs on British drug exports. That part of the trade relationship seems to be holding up better.
A White House official described the pharmaceutical pact as “historic” and said the US and UK would “continue to work towards full implementation” of the broader trade framework.
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