Amazon, Google, Meta, and Uber slapped with $2 billion retroactive tax bill, Trump suspends Canada trade talks

Mint

18 hours ago

US President Donald Trump has suspended trade talks with Canada, citing the country's refusal to back down on a new 3% digital services tax, calling it 'a direct and blatant attack on our country.'
The digital services tax imposed by Canada will impact major tech companies like Amazon, Google, Meta and Uber.
The tax is set to go into effect Monday and apply retroactively, leaving U.S. companies with a $2 billion U.S. bill due at the end of the month, Fortune reported.
Trump called the tax 'egregious' and immediately terminated all trade discussions with Canada, vowing to announce new tariffs on Canadian goods within seven days.
Trump later said he expects that Canada will remove the tax, citing the U.S.' economic leverage. 'Economically we have such power over Canada. We'd rather not use it,' Trump said in the Oval Office. 'It's not going to work out well for Canada. They were foolish to do it.'
Canadian Prime Minister Mark Carney responded to the situation on Friday by saying that his country would 'continue to conduct these complex negotiations in the best interests of Canadians. It's a negotiation.'
This move is the latest development in Trump's ongoing trade disputes since his second term began. The U.S. has already imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos and a general 10% tax on imports from most countries.
Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 U.S.-Mexico-Canada Agreement signed during Trump's first term.
Despite these tensions, Canada remains a crucial trading partner, supplying a large portion of crude oil, electricity and critical minerals.
As per data compiled by Fortune, around 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.
Canada is also the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals that the Pentagon is eager to obtain, the news agency said.
Daniel Beland, a political science professor at McGill University in Montreal, said it is a domestic tax issue, but it has been a source of tensions between Canada and the United States for a while because it targets U.S. tech giants.
'The Digital Services Tax Act was signed into law a year ago so the advent of this new tax has been known for a long time,' Beland said. 'Yet, President Trump waited just before its implementation to create drama over it in the context of ongoing and highly uncertain trade negotiations between the two countries.'