BRITAIN yesterday defied US pressure to cancel a new tax on tech firms.
Chancellor Sajid Javid wants to impose a levy on firms such as Amazon and Facebook from April.
He clashed with US Treasury Secretary Steve Mnuchin at the World Economic Forum in Davos, Switzerland, after the US warned the UK would face President Donald Trumps tariffs in response.
Downing Street hinted it would retaliate with tariffs on US goods.
The PMs official spokesman said: Additional tariffs will harm businesses and consumers on both sides of the Atlantic.
Mr Javid also irritated Washington by declaring a US trade deal is secondary in comparison to an agreement with Brussels.
Mr Javid said: Our first priority is getting an agreement with the EU. We are leaving in nine days but we still have to do the trade agreement.
That led Mr Mnuchin to quip as the pair faced questions on a panel, we thought wed go first, adding: They might be a little harder to deal with than we are.
He also said Mr Trump would go above Mr Javids head to discuss the tech tax stand-off with Boris Johnson. The PM is due to visit Mr Trump next month.
The Cabinets EU Exit Strategy Committee meets tomorrow to thrash out a plan for trade talks.
But Liz Truss and Dominic Raab want both EU and US deals negotiated at the same time.
A Cabinet source said they are of equal importance and Mr Javid was wrong to prioritise.