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Al Jazeera
a day ago
- Al Jazeera
What is Canada's digital tax and why is Trump killing trade talks over it?
As Canada pushes ahead with a new digital services tax on foreign and domestic technology companies, United States President Donald Trump has retaliated by ending all trade talks and threatened to impose additional tariffs on exports from Ottawa. In a post on his Truth Social platform on Friday, Trump called the new Canadian tax structure a 'direct and blatant attack on our country', adding that Canada is 'a very difficult country to trade with'. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,' he wrote. He added that he would announce new tariffs of his own for Canada in a matter of days. US companies such as Amazon, Meta, Google and Uber face an estimated $2bn in bills under the new tax. Trump's decision marks a sharp return to trade tensions between the two countries, abruptly ending a more cooperative phase since Mark Carney's election as Canada's prime minister in March. It also marks a further escalation in the trade-as-pressure tactic under Trump's second term in Washington. The US is Canada's largest trading partner by far, with more than 80 percent of Canadian exports destined for the US. In 2024, total bilateral goods trade exceeded US$762bn, with Canada exporting $412.7bn and importing $349.4bn – leaving the US, which counts Canada as its second-largest trading partner, with a goods deficit of $63.3bn. A disruption due to tariffs on products like automobiles, minerals, energy or aluminium could have large ripple effects across both economies. So, what is Canada's digital tax? Why is Carney facing domestic pushback on the taxes? And how is Washington responding? What is Canada's digital services tax? Canada's Digital Services Tax Act (DSTA) came into force in June last year. It is a levy on tech revenues generated from Canadian users – even if providers do not have a physical presence in the country. The DSTA was first proposed during the 2019 federal election under then-Prime Minister Justin Trudeau, and received approval in Canada on June 20, 2024. It came into force a week later, on June 28. The first payments of this tax are due on Monday, June 30, 2025. Large technology firms with global revenues exceeding $820m and Canadian revenues of more than $14.7m must pay a 3 percent levy on certain digital services revenues earned in Canada. Unlike traditional corporate taxes based on profits, this tax targets gross revenue linked to Canadian user engagement. Digital services the levy will apply to include: Online marketplaces, social media platforms, digital advertising and the sale or licensing of user data. One of the most contentious parts of the new framework for businesses is its retroactive nature, which demands payments on revenues dating back to January 1, 2022. Why is Trump suspending trade talks over the new tax? On June 11, 21 US Congress members sent a letter to President Trump, urging him to pressure Canada to eliminate or pause its Digital Services Tax. 'If Canada decides to move forward with this unprecedented, retroactive tax, it will set a terrible precedent that will have long-lasting impacts on global tax and trade practices,' they wrote. Then, in a Truth Social post on Friday this week, Trump said Canada had confirmed it would continue with its new digital services tax 'on our American Technology Companies, which is a direct and blatant attack on our Country'. He added that the US would be 'terminating ALL discussions on Trade with Canada, effective immediately' and that he would be levying new tariffs of his own on Canada within seven days. 'They have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products,' Trump said, adding, 'We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.' Later, at the Oval Office, Trump doubled down, saying: 'We have all the cards. We have every single one.' He noted that the US holds 'such power over Canada [economically]'. 'We'd rather not use it,' Trump said, adding: 'It's not going to work out well for Canada. They were foolish to do it. 'Most of their business is with us, and when you have that circumstance, you treat people better.' Trump also said he would order a Section 301 investigation under the Trade Act to assess the DSTA's effect on US commerce, which could potentially lead to other punitive measures. On Friday, White House National Economic Council director, Kevin Hassett, told the Fox Business Friday programme: 'They're taxing American companies who don't necessarily even have a presence in Canada.' Calling the tax 'almost criminal', he said: 'They're going to have to remove it. And I think they know that.' How has Canada responded? Relations had seemed friendlier between the two North American neighbours in recent months as they continue with trade talks. Trump and former Prime Minister Justin Trudeau had clashed previously – with Trump calling Trudeau 'very dishonest' and 'weak' during the 2018 G7 talks in Canada. But newly elected Carney enjoyed a cordial visit with Trump in May at the White House, while Trump travelled to Canada for the G7 summit in Alberta on June 16 and 17. Carney said at the summit that the two had set a 30-day deadline for trade talks. In a brief statement on Friday, Prime Minister Carney's office said of Trump's new threats to suspend trade talks over the digital tax: 'The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses.' Last week, Canadian Finance Minister Francois-Philippe Champagne told reporters that the digital tax could be negotiated as part of the broader, ongoing US-Canada trade discussions. 'Obviously, all of that is something that we're considering as part of broader discussions that you may have,' he had said. Those discussions had been expected to result in a trade deal in July. However, they are now in limbo. What do Canadian business leaders say? Carney has been facing pressure from domestic businesses as well, which have lobbied the government to pause the digital services tax, underlining that the new framework would increase their costs for providing services and warning against retaliation from the US. The Business Council of Canada, a nonprofit organisation representing CEOs and leaders of major Canadian companies, said in a statement that, for years, it 'has warned that the implementation of a unilateral digital services tax could risk undermining Canada's economic relationship with its most important trading partner, the United States'. 'That unfortunate development has now come to pass,' the statement noted. 'In an effort to get trade negotiations back on track, Canada should put forward an immediate proposal to eliminate the DST in exchange for the elimination of tariffs from the United States.' Has Trump used tariffs to pressure Canada before? Yes. Prior to the DSTA, Trump has used tariffs to pressure Canada over what he says is its role in the flow of the addictive drug, fentanyl, and undocumented migration into the US, as well as broader trade and economic issues. On January 20, in his inaugural address, Trump announced a 25 percent tariff on all Canadian goods and a 10 percent tariff on Canadian energy resources. Trump claimed that Canada has a 'growing footprint' in fentanyl production, and alleged that Mexican cartels operate fentanyl labs in Canada, particularly in British Columbia, Alberta and Ontario. These tariffs were paused for 30 days following assurances from Canada that appropriate action would be taken to curb the flow of fentanyl, and then re-imposed in early March. Do other countries levy a similar digital tax? Yes, several countries around the world have introduced digital services taxes (DSTs) similar to Canada's. France was one of the first to introduce a DST in 2019, eliciting an angry response from Trump who was serving his first term as president. The French tax is a 3 percent levy on revenues from online advertising, digital platforms and sales of user data. The UK followed with a 2 percent tax on revenues from social media platforms and search engines. Spain, Italy, and Austria have also implemented similar taxes, with rates ranging from 3 to 5 percent. Turkiye has one of the highest DST rates at 7.5 percent, covering a wide range of digital services such as content streaming and advertising. Outside Europe, India has a 2 percent 'equalisation levy' on foreign e-commerce operators which earn revenues from Indian users. Kenya and Indonesia have also created their own digital tax systems, though they're structured slightly differently – Indonesia, for instance, applies Value Added Tax (VAT) – or sales tax – on foreign digital services, rather than a DST. The US government has strongly opposed these taxes; some of these disputes have been paused as part of ongoing negotiations led by the Organization for Economic Co-operation and Development (OECD), an international organisation made up of 38 member countries, which is working on a global agreement for taxing digital companies fairly. Canada held off on implementing its DST until 2024 to give time for the OECD talks. But when progress stalled, it went ahead with the 3 percent tax that applies retroactively since January 2022. Should the EU be worried about this? The European Union is likely to be watching this situation closely as digital tax is likely to be a key concern during its own trade talks with the US. Trump has repeatedly warned that similar tax measures from other allies, including EU countries, could face severe retaliation. Trump's administration has previously objected to digital taxes introduced by EU member states like France, Italy, and Spain. In 2020, the US Trade Representative investigated these taxes under Section 301 and threatened retaliatory tariffs, though those were paused pending OECD-led global tax negotiations. The European Commission has confirmed that digital taxation remains on the agenda, especially if a global deal under the OECD fails to materialise. President Ursula von der Leyen said on June 26 that 'all options remain on the table' in trade discussions with the US, including enforcement mechanisms against discriminatory US measures. The high-stakes trade negotiations ongoing between the US and the EU have a deadline for July 9 – the date that Trump's 90-day pause on global reciprocal tariffs is due to expire. Trump has threatened to impose new tariffs of up to 50 percent on key European exports, including cars and steel, if a deal is not reached. In response to these threats, the EU has prepared a list of retaliatory tariffs worth up to 95 billion euros ($111.4bn), which would target a broad range of US exports, from agricultural products to Boeing aircraft. EU leaders have signalled that they will defend the bloc's tax sovereignty, while remaining open to negotiation.
Al Jazeera
a day ago
- Al Jazeera
What is Thimerosal, vaccine preservative called ‘toxic' by US health chief?
During the first meeting of Health and Human Services Secretary Robert F Kennedy Jr's recently downsized vaccine panel, the group voted to stop recommending flu vaccines containing thimerosal, a vaccine preservative. In a lengthy June 24 X post that preceded the meeting, Kennedy, who spent two decades as an anti-vaccine movement leader, described thimerosal using terms such as 'toxic' and said hundreds of studies identify it as a carcinogenic 'potent neurotoxin'. He also said there are high doses of mercury in flu shots recommended to pregnant women and children. The US Centers for Disease Control and Prevention's Advisory Committee on Immunisation Practices' (ACIP) two-day meeting on June 25 and 26 included discussion of vaccines containing thimerosal before its vote on flu vaccines. ACIP is an independent group which provides vaccine recommendations the CDC director reviews and decides whether to formally adopt. Earlier in June, Kennedy dismissed 17 ACIP members, replacing them with seven new members, including people who've expressed doubt about vaccine efficacy and promoted anti-vaccine falsehoods. Doctors and scientists who study vaccines have been researching thimerosal's use for decades. Here's what we know about the vaccine preservative and its removal from flu vaccines. What is thimerosal? Thimerosal is a mercury-based preservative used in some vaccines. Many people – particularly those who are pregnant or breastfeeding – encounter warnings about consuming mercury, such as in seafood. But those warnings are about methylmercury, which is found in certain kinds of fish and is known to be toxic to people when consumed at high levels. Thimerosal contains ethylmercury – a single-letter difference that might not sound significant, but is. Human bodies can break down and excrete ethylmercury quickly, meaning it is less likely to cause harm. By contrast, methylmercury is more likely to accumulate in the body and cause harm. In vaccines, thimerosal is added to prevent harmful microbes such as bacteria and fungi from growing in vaccine vials. 'Introduction of bacteria and fungi has the potential to occur when a syringe needle enters a vial as a vaccine is being prepared for administration,' the CDC's website said. 'Contamination by germs in a vaccine could cause severe local reactions, serious illness or death. In some vaccines, preservatives, including thimerosal, are added during the manufacturing process to prevent germ growth.' Thimerosal has been at the heart of Kennedy's anti-vaccine activism for 20 years. In 2005, Kennedy wrote an article co-published by Rolling Stone and Salon that alleged leading health agencies including the CDC and US Food and Drug Administration had colluded with vaccine manufacturers to conceal a study that found thimerosal 'may have caused autism in thousands of kids'. Scientists and researchers said Kennedy's argument was inaccurate and misleading. Continued research has found no link between thimerosal and autism. Kennedy's article was removed from Rolling Stone, and Salon retracted it in 2011. In 2015, Kennedy wrote a book opposing thimerosal's use in vaccines. Which vaccines use thimerosal? Thimerosal is not used in the vast majority of vaccines. All vaccines the CDC routinely recommends for children age six or younger are available without thimerosal. Children receiving the routine paediatric vaccine schedule 'can get completely immunised without any thimerosal-containing vaccines', said Dr Mark Sawyer, a paediatrics professor at the University of California San Diego School of Medicine and a paediatric infectious disease physician. Some childhood vaccines have never contained thimerosal. These include the measles, mumps and rubella – or MMR – vaccine, the varicella or chickenpox vaccine, the inactivated polio vaccine and the pneumococcal conjugate vaccine. Thimerosal was removed from most vaccines – including all childhood vaccines – as of 2001, the CDC said. Thimerosal is still used in vaccines today, but not as widely. The preservative is in only a small fraction of influenza vaccine vials, specifically the multi-dose vials that constitute a small portion of the US flu shot supply, Dr Jake Scott told PolitiFact. Scott is a Stanford University School of Medicine infectious disease specialist. The FDA said thimerosal use has declined as vaccine manufacturers have developed more single-dose vaccines that do not require preservatives. Scott said the CDC lists 12 influenza vaccine formulations for the 2024 to 2025 flu season, which will also cover the 2025 to 2026 season because no new flu vaccines have been licensed. Of those 12 vaccines, just three are multi-dose vaccines that contain thimerosal at 25 micrograms – equal to 25 millionths of a gram – per dose, he said. CDC's supply data shows single-dose, thimerosal-free syringes make up about 96 percent of the US flu vaccine supply, leaving roughly 4 percent as multi-dose vials, Scott said. 'Single-dose syringes are the default for paediatrics and prenatal care, so real-world exposure is even lower,' he said. Because flu vaccines with thimerosal constitute a small portion of the influenza vaccine supply, public health experts told The Washington Post the committee's vote to stop recommending them would have a limited impact, although it could make flu shots more expensive and less accessible in some parts of the US. What does research show about thimerosal? Because anti-vaccine activists' focus has centred on whether thimerosal causes autism, numerous scientific studies have investigated a potential link and found no causal relationship between the preservative and autism. When scientists evaluated thimerosal's potential impacts and risks they found: Giving infants vaccines containing thimerosal 'does not seem to raise blood concentrations of mercury above safe values in infants' as the ethylmercury 'seems to be eliminated from blood rapidly via the stools' after vaccination. Three controlled and two uncontrolled observational studies 'consistently provided evidence of no association' between thimerosal-containing vaccines and autism. 'No scientific evidence exists that thimerosal-containing vaccines are a cause of adverse events among children born to women who received influenza vaccine during pregnancy.' Vaccine researchers told PolitiFact that thimerosal was removed from vaccines out of an abundance of caution, not because research proved that thimerosal was unsafe. Thimerosal was removed from vaccines because people thought it might cause problems, said Rachel Roper, a microbiology and immunology professor at East Carolina University. But ultimately, 'studies were done and it was shown to be safe'. There's no evidence to date that thimerosal 'causes any harm whatsoever', Sawyer said.
Al Jazeera
2 days ago
- Al Jazeera
AI is fuelling a new wave of border vigilantism in the US
In Arizona's borderlands, the desert is already deadly. People crossing into the United States face blistering heat, dehydration, and exhaustion. But for years, another threat has stalked these routes: Armed vigilante groups who take it upon themselves to police the border – often violently, and outside the law. They have long undermined the work of humanitarian volunteers trying to save lives. Now, a new artificial intelligence platform is actively encouraging more people to join their ranks. recently launched in the United States, offers cryptocurrency rewards to users who upload photos of 'suspicious activity' along the border. It positions civilians as front-line intelligence gatherers – doing the work of law enforcement, but without oversight. The site opens to a map of the United States, dotted with red and green pins marking user-submitted images. Visitors are invited to add their own. A 'Surveillance Guidance' document outlines how to capture images legally in public without a warrant. A 'Breaking News' section shares updates and new partnerships. The platform is fronted by Enrique Tarrio – a first-generation Cuban American, far-right figure and self-styled 'ICE Raid Czar', who describes himself as a 'staunch defender of American values'. I have been researching border surveillance since 2017. Arizona is a place I return to often. I've worked with NGOs and accompanied search-and-rescue teams like Battalion Search and Rescue, led by former US Marine James Holeman, on missions to recover the remains of people who died attempting the crossing. During that time, I've also watched the region become a laboratory for high-tech enforcement: AI towers from an Israeli company now scan the desert; automated licence plate readers track vehicles far inland; and machine-learning algorithms – developed by major tech companies – feed data directly into immigration enforcement systems. This is not unique to the United States. In my book The Walls Have Eyes: Surviving Migration in the Age of Artificial Intelligence, I document how similar technologies are being deployed across Europe and the Middle East – from spyware in Greek refugee camps to predictive border enforcement by the EU's border agency, Frontex. These tools extend surveillance and control. They do not bring accountability or safety. Since Donald Trump's re-election in 2024, these trends have accelerated. Surveillance investment has surged. Private firms have flourished. ICE has expanded its powers to include unlawful raids, detentions and deportations. Military units have been deployed to the US-Mexico border. Now, ICERAID adds a new layer – by outsourcing enforcement to the public. The platform offers crypto rewards to users who upload and verify photographic 'evidence' across eight categories of alleged criminal activity. The more contributions and locations submitted, the more tokens earned. Surveillance becomes gamified. Suspicion becomes a revenue stream. This is especially dangerous in Arizona, where vigilante violence has a long history. Paramilitary-style groups have detained people crossing the border without legal authority, sometimes forcing them back into Mexico. Several people are known to have died in such encounters. ICERAID does not check this behaviour – it normalises it, providing digital tools and financial incentives for civilians to act like enforcers. Even more disturbing is the co-optation of resistance infrastructure. ICERAID's URL, is nearly identical to the website of People Over Papers, a community-led initiative that tracks ICE raids and protects undocumented communities. The similarity is no accident. It is a deliberate move to confuse and undermine grassroots resistance. ICERAID is not an anomaly. It is a clear reflection of a broader system – one that criminalises migration, rewards suspicion, and expands enforcement through private tech and public fear. Public officials incite panic. Corporations build the tools. Civilians are enlisted to do the job. Technology is never neutral. It mirrors and amplifies existing power structures. ICERAID does not offer security – it builds a decentralised surveillance regime in which racialised suspicion is monetised and lives are reduced to data. Recognising and resisting this system is not only necessary to protect people on the move. It is essential to the survival of democracy itself. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.
