President Joe Biden has ramped up pressure on Britain to back a global deal on taxes after announcing steep tariffs in retaliation for measures targeting US tech.
The White House has said it will slap new trade duties on six countries including the UK, India, Spain and Italy, but is suspending them for six months as officials attempt to thrash out a deal on a global minimum corporate tax rate.
Unless an agreement is reached, America will introduce a 25pc tariff on UK goods worth $887m (£626m), including types of clothing, footwear and furniture.
The Treasury angered the US by going alone with a digital services tax targeting revenues generated in Britain by the likes of Facebook and Google.
Taxing tech giants fairly is Britain's key demand in wider negotiations on global tax as the US pushes for a minimum corporate rate of at least 15pc.
US trade representative Katherine Tai said America is focused on finding a solution over global tax, including on digital services.
She added: "Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs."
The Chancellor, Rishi Sunak, has urged the White House to agree a deal that will hit Silicon Valley businesses as the UK threatened to hold up a wider agreement.
With the topic set to be discussed at G7 meetings in the UK this month, Mr Sunak said he is hoping to help the US "understand why fair taxation of tech companies is important to us".
Speaking to the Mail on Sunday, he said: "There's a deal to be had, so I'm urging the US, and all of the G7, to come to the table next week and get it done."
Following the US tariffs announcement, a Treasury spokesman said the digital services tax was "reasonable, proportionate and non-discriminatory".
He added: "It’s also temporary and we’re working positively with international partners to find a global solution to this problem. We will remove the [tax] when that is implemented."
It came as Liz Truss, the Trade Secretary, vowed to shift Britain’s “economic centre of gravity” to fast-growing Asia after taking a stride towards entering a huge Pacific rim free trade bloc.
The 11 nations in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have agreed to start talks with the UK, which has made the bloc a top target in its post-Brexit trade strategy.
Negotiations will begin within weeks after Britain has published its approach, economic assessment and consultation response, the Department for International Trade revealed.
Allowing the UK to join the bloc - whose members include Australia, Canada and Japan - would boost its combined GDP close to that of the European Union, according to Japanese economy minister Yasutoshi Nishimura.
The CPTPP also includes Mexico, New Zealand, Singapore and Vietnam, with the huge free trade area accounting for 13pc of global GDP.
The deal removes 95pc of tariffs between members, but unlike the EU it does not seek to create a single market or customs union. DIT insiders are hopeful that a deal to include the UK could be struck in 2022.
Ms Truss said that membership is a “huge opportunity” for the UK to tap rapidly growing countries.
She said: “It will help shift our economic centre of gravity away from Europe towards faster-growing parts of the world, and deepen our access to massive consumer markets in the Asia-Pacific.
“We would get all the benefits of joining a high-standards free trade area, but without having to cede control of our borders, money or laws.”
The UK is seeking to move negotiations forward as quickly as possible, officials said, after CPTPP members formally agreed to starting the joining process.
About £110bn of the UK's trade was with countries in the pact in 2019 - some 8pc of Britain's total. A source said the Government wanted to take advantage of the CPTPP's ties in services and digital trade in particular to secure opportunities British firms were unable to access in the EU.
The CPTPP deal came into force in late 2018 and Britain formally applied to join the bloc in February.
The UK is also continuing separate trade talks with a number of members such as Australia and New Zealand, while ministers are also eyeing deals with India and the Gulf states.
The pact's members said: “The United Kingdom’s potential membership would support the mutual interests, common values and commitment to upholding the rules-based trading system shared by the members of the CPTPP.”
A deal with the UK “would also promote market-oriented principles and help to counter protectionism and the use of unjustified trade restrictive measures”, they added.