Economic Watch: U.S. ramps up trade pressure on multiple fronts as 90-day tariff deadline approaches
BEIJING, July 1 (Xinhua) -- Days after U.S. President Donald Trump threatened to halt trade talks and impose tariffs, Canada scrapped its planned digital services tax on Sunday. The White House praised the move, saying talks would resume immediately and declaring that Canada had "caved" to the United States.
The United States is scrambling to wind up trade talks with a large number of trading partners as the self-imposed deadline of July 9 is approaching. Following Canada's concession, Trump is continuing his efforts to press multiple trade partners.
While the EU stood firm on protecting its digital sovereignty and rejected U.S. demands to include digital laws in trade talks, Trump moved on to Japan on Sunday, accusing it of refusing to buy American rice amid a shortage and threatening a formal trade complaint shortly after labeling U.S.-Japan trade "unfair."
U-TURN ON TALKS
Canadian Finance Minister Francois-Philippe Champagne announced Sunday that Canada will rescind its digital services tax as it prepares for a broader trade agreement with the United States.
The tax, which was designed to take effect on Monday, would impose a 3 percent levy on the revenue of U.S. multinational companies like Amazon, Google and Meta earned from Canadian users.
"It's very simple: Canadian Prime Minister (Mark) Carney and Canada caved to President Trump and the United States of America," White House Press Secretary Karoline Leavitt told reporters on Monday at a briefing.
Leavitt's comments followed remarks by National Economic Council Director Kevin Hassett, who said the United States will restart trade negotiations with Canada immediately.
According to him, the White House is likely to push other countries to abandon their digital services taxes in future trade negotiations, building on Canada's recent reversal.
"My expectation is that the digital services taxes around the world will be taken off, and that that will be a key part of the ... ongoing trade negotiations that we have," Hassett was quoted by CNBC as saying.
Hassett suggested that countries planning to maintain or introduce digital services taxes could face the "wrath" from U.S. Trade Representative Jameson Greer over what he called "unfair trade practices."
INEFFECTIVE STRATEGY
Washington's pressure tactics didn't prove effective with the EU, where officials have firmly rejected including digital legislation in trade talks with the United States.
"Our legislation will not be changed. The Digital Markets Act (DMA) and the Digital Services Act (DSA) are not on the table in the trade negotiations with the U.S.," European Commission spokesperson Thomas Regnier told a briefing Monday.
Washington has repeatedly slammed the EU's digital regulations, including the DMA and DSA, as unfair and called for looser oversight of American tech firms. In February, the White House warned it might retaliate if EU regulators targeted U.S. companies under those rules.
Regnier emphasized that European Commission President Ursula von der Leyen has made it clear that EU legislation is not up for negotiation, "and this also includes, of course, our digital legislation," he said.
"We're not going to adjust the implementation of our legislation based on the actions of third countries. If we started to do that, then we would have to do it with numerous third countries," Regnier added.
Nevertheless, the spokesperson said that the Commission remains committed to reaching a trade deal with the United States by July 9.
Trump had earlier said the talks were "going nowhere" and threatened a 50 percent tariff on all EU imports starting June 1. After a call with von der Leyen, he agreed to postpone the hike until July 9.
European Commissioner for Trade and Economic Security Maros Sefcovic said on Monday that he would travel to Washington on Tuesday to try to avoid higher U.S. tariffs and reach a deal "fair for both sides."
Currently, the EU faces 50 percent U.S. tariffs on steel, aluminum and 25 percent on automobiles, alongside 10 percent baseline duties on most other exports.
NEXT ON LIST
In a Truth Social post on Monday afternoon, Trump claimed that the Japanese people and their government were "spoiled" because they wouldn't buy American rice.
"To show people how spoiled Countries have become with respect to the United States of America, and I have great respect for Japan, they won't take our RICE, and yet they have a massive rice shortage," Trump wrote. "In other words, we'll just be sending them a letter."
Yet rice, like the EU's digital regulations, is not on the Japanese menu for trade talks with the United States.
On Tuesday, Japanese Economic Revitalization Minister Ryosei Akazawa, who is also the chief representative in tariff negotiations with the U.S. administration, said that his country will not sacrifice the agricultural sector as part of its tariff talks with the United States, adding that he would continue to negotiate with his U.S. counterparts to protect Japan's national interests.
"I have repeatedly stated that agriculture is the foundation of the nation," he told a press conference.
Trump's rice complaint followed another swipe at Tokyo's trade practices. In an interview aired on Fox News a day earlier, he slammed Japan for importing too few American cars, saying, "They won't take our cars, and yet we take millions and millions of their cars into the United States. It's not fair," he said.
"I could send one (letter) to Japan: 'Dear Mr. Japan, here's the story. You're going to pay a 25 percent tariff on your cars,'" Trump said during the interview.
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