The government could end up effectively “robbing disabled people to appease Musk and Trump,” according to the Liberal Democrats.

The accusation comes after Rachel Reeves failed to rule out dropping the digital services tax, which would boost tech giants like the US president’s right-hand man Elon Musk.

It’s believed Labour may try to secure a UK exemption to Donald Trump’s next round of global tariffs in return.

The chancellor told the BBC there are “ongoing” talks about altering the 2% levy introduced in 2020 – which raises £800m a year for the UK.

Asked if the tax would be changed to appease Trump, Reeves said: “We’ve got to get the balance right, and those discussions at the moment are ongoing.

“We want to make progress. We do not want to see British exporters subject to higher tariffs.”

But the idea has been torn apart by the Liberal Democrats, especially considering Labour has just announced £5bn of cuts from the welfare budget.

Lib Dem Treasury spokesperson and deputy party leader Daisy Cooper called for Labour to make sure social media giants “pay their fair share”.

She said: “Millions of people are feeling deeply anxious about the government’s cuts to support for disabled people and the impact they will have.

“If the government goes ahead with slashing taxes for the social media giants whilst cutting welfare for millions of the most vulnerable, it would be tantamount to robbing disabled people to appease Musk and Trump.

“The government’s priority should be standing up for the British people, not bowing down to Trump and his US billionaire cronies.

“That means asking social media giants to pay their fair share, and boosting growth through a new trade deal with the EU.”

Speaking at his party’s spring conference, Lib Dem leader Ed Davey also warned Labour that “appeasement never works with bullies” and “it doesn’t work with Trump – as his tariffs on British steel already show.”

Davey – who was once called a “snivelling cretin” by the world’s richest man – added: “And let me say this to Elon Musk, who I know is my biggest fan…

“We will make out-of-control social media giants like you pay more – so we can defend our children and young people from the harm you’re causing them.”

The Lib Dems want the digital services tax to be tripled to 6%.

Trump has already announced a host of tariffs on goods from other countries, including the UK, since his inauguration in January.

He has since declared that April 2 will be “Tariff Day”, meaning more taxes charged on imports are expected.