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USA Today
2 days ago
- Business
- USA Today
Canada scraps digital services tax to advance stalled US trade talks
OTTAWA, June 29 (Reuters) - Canada scrapped its digital services tax targeting U.S. technology firms late on Sunday, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States. Canadian Prime Minister Mark Carney and U.S. President Donald Trump will resume trade negotiations in order to agree on a deal by July 21, Canada's finance ministry said in a statement. Trump abruptly called off trade talks on Friday over the tax targeting U.S. technology firms, saying that it was a "blatant attack." He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push U.S.-Canada relations back into chaos after a period of relative calm. More: Trump says U.S. will end trade talks with Canada, could move deadline for other tariffs The breakdown in trade talks comes after the two leaders met at the G7 in mid-June and Carney said they had agreed to wrap up a new economic agreement within 30 days. Canada's planned digital tax was 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022. It would have impacted U.S. technology firms, including Amazon AMZN.O, Meta META.O, Alphabet's Google GOOGL.O and Apple AAPL.O, among others. Monday collection will be halted, the Canada's finance ministry statement said, and Finance Minister François-Philippe Champagne will bring forward legislation to rescind the Digital Services Tax Act. "The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians," the statement said. "Canada's preference has always been a multilateral agreement related to digital services taxation." Stocks index futures rose after the news the digital tax will be rescinded and the bullish sentiment spilled over into Asian markets. Canada is the second-largest U.S. trading partner after Mexico, and the largest buyer of U.S exports. It bought $349.4 billion of U.S. goods last year and exported $412.7 billion to the U.S., according to U.S. Census Bureau data. The Biden administration had requested trade dispute settlement consultations over the tax in 2024, saying it was inconsistent with Canada's North American trade deal obligations. Canada had escaped Trump's broad tariffs imposed in April but faces 50% duties on steel and aluminum. (Reporting by Kanjyik Ghosh in Bengaluru and Promit Mukherjee in Ottawa; Writing by Caroline Stauffer; Editing by Christopher Cushing and Michael Perry)
Express Tribune
2 days ago
- Business
- Express Tribune
Canada drops digital tax on US tech firms
Canada scrapped its digital services tax targeting US technology firms late on Sunday, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States. Canadian Prime Minister Mark Carney and US President Donald Trump will resume trade negotiations to agree on a deal by July 21, Canada's finance ministry said in a statement. Trump abruptly called off trade talks on Friday over the tax targeting US technology firms, saying that it was a "blatant attack." He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push US-Canada relations back into chaos after a period of relative calm. The breakdown in trade talks comes after the two leaders met at the G7 in mid-June and Carney said they had agreed to wrap up a new economic agreement within 30 days. Canada's planned digital tax was 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022. It would have impacted US technology firms, including Amazon AMZN.O, Meta META.O, Alphabet's Google GOOGL.O and Apple AAPL.O, among others. Monday collection will be halted, the Canada's finance ministry statement said, and Finance Minister François-Philippe Champagne will bring forward legislation to rescind the Digital Services Tax Act. "The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians," the statement said. "Canada's preference has always been a multilateral agreement related to digital services taxation." Stocks index futures rose after the news the digital tax will be rescinded and the bullish sentiment spilled over into Asian markets. Canada is the second-largest US trading partner after Mexico, and the largest buyer of U.S exports. It bought $349.4 billion of US goods last year and exported $412.7 billion to the US, according to US Census Bureau data. The Biden administration had requested trade dispute settlement consultations over the tax in 2024, saying it was inconsistent with Canada's North American trade deal obligations. Canada had escaped Trump's broad tariffs imposed in April but faces 50% duties on steel and aluminum.
USA Today
02-05-2025
- Business
- USA Today
Amazon faces tariff pressure as sellers stockpile inventory
Amazon faces tariff pressure as sellers stockpile inventory Show Caption Hide Caption Amazon's tariff transparency plans President Trump has said tariffs will likely impact shoppers, saying in a Cabinet meeting that tariffs could lead to fewer, but more expensive gifts this upcoming holiday season. Fox - 5 DC Amazon AMZN.O on Thursday tried to temper investor concerns about the impact of the Trump administration's tariffs on its e-commerce business, but the company may have few options left to ensure small third-party sellers stay put in the face of crushing levies. U.S. President Trump has imposed 145% duties on imports from China, a move that has left companies including Amazon, Walmart WMT.N and Apple AAPL.O scrambling to reassess supply chains and find ways to keep costs down. Amazon said it has not seen any softness in demand yet, nor much increase in average selling prices of retail items. There had been some "heightened buying in some categories," it said. On a post-earnings call with investors, CEO Andy Jassy said the company was working with its sellers to move orders to the U.S. earlier to avoid further tariffs on merchandise. "Our third-party sellers have pulled forward a number of items so they have inventory here as well ... we're encouraging that because we're trying to keep prices as low as possible," Jassy said. But stocking up was only a band aid, analysts said. As shoppers step up purchases to avoid tariff impacts, the company and its sellers may struggle to avoid price increases in the coming months as they blow through inventory and place new orders. Amazon CEO on tariff impacts: Company 'better positioned' than competitors "I can't imagine that they stocked up on more than six months' worth of inventory," said Gil Luria, analyst at D.A. Davidson. "If we get past the next six months and we're still as uncertain as we are today ... then Amazon will have to take actions that are less palatable. It's gonna have to let some higher prices flow through, take some lower margins structurally, have to push its merchants to absorb lower margins." For Apple and Amazon - and other companies including Qualcomm QCOM.O, Samsung and Intel INTC.O that are exposed to everyday consumers - tariffs have become the crisis that could set them back in a race against rivals Microsoft MSFT.O and Alphabet's GOOGL.O Google. Amazon shares dipped about 1% on Friday. Apple stock fell nearly 4%, as the iPhone maker on Thursday estimated that tariffs would add about $900 million in costs to the quarter ending in June if rates do not change. Apple CEO Tim Cook outlined big changes to the company's supply chain. Amazon's AWS cloud business, which powers its profits, is usually a bulwark against swings in its e-commerce business, but that segment's performance in the first quarter disappointed the Street after Microsoft's Azure cloud business well outperformed expectations. Investors had lofty expectations for the cloud businesses, which were reinforced by Microsoft and Google's results and raised expectations for Amazon's AWS, said Will Rhind, CEO of global ETF issuer GraniteShares. "But I still think this is a great business and it's still growing," he said. Pain looms later this year Amazon's tariff troubles extend to more than just the big duties. On May 2, the end of de minimis - a trade exemption that allows low-cost merchandise shipped directly to shoppers to enter the U.S. duty-free - is expected to have a big impact on some of the company's third-party sellers and its Haul business, which ships much of its merchandise from China. The pullback is already starting to show. Some sellers are already planning to sit out major sales events such as Amazon Prime Day in July, Reuters has reported. Growth in revenue from Amazon's third-party seller services more than halved to 7% in the first quarter, excluding the impact of foreign exchange. Third-party seller services account for nearly a quarter of the company's revenue. And while Amazon forecast total second-quarter sales above Wall Street estimates, its outlook for core profitability fell short. Amazon did not provide any details on whether it was making it easier for its sellers to keep costs down, or if the company would absorb some of the impact. Bob O'Donnell, president and chief analyst at TECHnalysis Research, said, "The worst of this is going to hit in Q3 and Q4. Right now, everybody's playing sort of the short-term game because they don't really know what else to do." Reporting by Deborah Sophia in Bengaluru and Arriana McLymore in New York City; Editing by Sayantani Ghosh and Sonali Paul
USA Today
26-02-2025
- Business
- USA Today
Amazon\u00a0debuts new\u00a0Alexa+ with\u00a0voice assistant and AI overhaul
Amazon debuts new Alexa+ with voice assistant and AI overhaul Show Caption Hide Caption Amazon suspends drone deliveries in two states Amazon suspends drone operations in Texas and Arizona. The announcement was made after multiple crashes with two newly built drones during testing. Straight Arrow News Amazon AMZN.O on Wednesday unveiled the first major overhaul of its Alexa voice assistant since its introduction more than a decade ago, embedding it with generative artificial intelligence. The effort carries significant weight at Amazon, which has plowed billions of dollars into Alexa since its launch in 2014 in the hope of putting the service into a range of devices and ultimately driving sales on its main e-commerce website. "Alexa knows almost every instrument in your life, your schedule, your smart home, your preferences, the devices you're using, the people you're connected to, the entertainment you love and uses many of the apps you use, a lot of the services you need," said Panos Panay, Amazon's head of devices and services, at a launch event in New York. The new service is called Alexa+, Panay said, echoing the nomenclature of the higher tier of many tech and streaming service offerings. Alexa+ is free for Amazon Prime members and is priced at $19.99 a month for non-Prime users. The service will be available in March to some users, with the rollout expanding to more people over time. Amazon had considered pricing the service at $5 or $10 per month for all users with no Prime tie-in. Panay demonstrated how Alexa can store, through prompts, customer preferences - for example, that a household member is vegetarian and prefers Greek and Italian food but eschews peanut butter. It can be used to make dinner reservations and send timed texts or reminders. In case you missed it: Amazon is dropping its 'Try Before You Buy' purchasing option The service can connect to Amazon products such as Ring doorbells to show recordings from its cameras. Alexa director Mara Segal said Alexa can review documents such as a homeowners association contract so that a resident knows what is allowed, like installing solar panels. Amazon shares rose 1.7% to $216.45. Competition from Apple, Google The event marked the unveiling of a secret project known internally as "Banyan" aimed at making Alexa more conversational. Generative AI is a type of artificial intelligence that can learn from data and improve over time. Following the company's presentation, Amazon executives presented different capabilities of the service like using it for food ordering, smart home connections and video streaming. But it did not permit media to test the service themselves. Some who worked on the service had told Reuters that it occasionally provided incorrect answers to user questions or lagged for several seconds before completing a prompt. During the demonstration Wednesday, Panay and other executives had to ask more than once on a few occasions to have the Alexa service respond. While Amazon's Alexa was launched three years after Apple's Siri hit the iPhone maker's devices, Alexa helped make the use of voice assistants more mainstream. Still, the lack of solid improvements and overhauls to Alexa over the years meant an erosion in consumer usage of the service, especially in the age of AI. Apple AAPL.O has already incorporated its suite of AI features, dubbed Apple Intelligence, into its Siri voice assistant, while Google GOOGL.O has revamped its voice assistant using its AI chatbot Gemini. Alexa is voice-controlled software installed in products such as smart speakers that can provide answers to user questions, play music, set timers and serve as a hub for home automation, by linking internet-connected devices so that, for instance, a light can be turned on with just voice prompts. The new Alexa AI service will be able to respond to multiple prompts in sequence and even act as an "agent" by taking actions for users without their direct involvement. That contrasts with the current iteration which generally handles only a single request at a time. Amazon has said there are some 500 million Alexa-capable devices in consumer hands already, meaning the revamp is at once a huge money-making opportunity for the Seattle retailer - and a big financial risk if it does not live up to expectations. Amazon said Alexa+ will use the best AI model available for a given task using Bedrock, Amazon's grab bag of AI services to allow for experimentation. But Daniel Rausch, vice president of Alexa and Echo, acknowledged AI startup Anthropic's contribution to building Alexa+, confirming a Reuters story that Anthropic's Claude was an underpinning of the service. Amazon has invested $8 billion in Anthropic. Reporting by Greg Bensinger; Additional reporting by Deborah Sophia in Bengaluru; Editing by Christopher Cushing, Rod Nickel, Alexandra Hudson
