UK taxes on big tech firms may be changed as part of a deal to avoid US President Donald Trump’s next raft of tariffs, Chancellor Rachel Reeves has suggested.

She said talks are “ongoing” about tweaks to the Digital Services Tax (DST), which affects global tech giants like Amazon and Meta.

The 2% levy introduced in 2020 raises about £800m a year for the UK, but the BBC understands it could be altered in exchange for the US not imposing more import taxes on the UK, following the barrage of tariffs Trump has already announced.

The potential change was criticised by the Liberal Democrats, who said Labour is “at risk of losing its moral compass”.