US pauses implementation of $40 billion technology deal with Britain

(Reuters) - The United States is stalling the implementation of 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, in a celebration of the countries' close ties and ability to work together 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 U.S. has paused implementation of the tech deal. The New York Times, which first reported the move, said U.S. 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 U.S. beef exports without compromising UK standards and insist digital regulations and tax will not be negotiated away.

A spokesperson for British Prime Minister Keir Starmer declined to comment in detail on what he said were "live negotiations," adding that the relationship with Washington was still strong.

"Negotiations of this kind are never straightforward. Both parties obviously want what's best for their countries, but... we remain in active conversations," he told reporters, adding it was "natural and normal" for countries to prioritise their own interests.

"These talks are not simple. They are complex, and they take time to secure."

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 U.S. 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, and "raised the importance of keeping up momentum on implementing all aspects of the UK-US deal," his office said.

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