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Yahoo
2 hours ago
- Business
- Yahoo
Trump wants Canada's digital services tax gone before trade talks resume
U.S. President Donald Trump says he's ending all trade discussions with Canada to hit back at Ottawa for slapping a tax on web giants — and he wants it removed before negotiations can begin again. Canada and the U.S. have been locked in talks to get Trump to lift his punishing tariffs on Canadian goods, levies that have already led to major economic dislocations, job losses and a drop in southbound exports. Trump and Prime Minister Mark Carney agreed at the G7 last week to reach some agreement on the trade dispute within 30 days. Speaking in the Oval Office on Friday afternoon, Trump said the U.S. has "such power over Canada," and that he's upset the country is following a taxation strategy similar to Europe's. "It's not going to work out well for Canada. They were foolish to do it," he said of imposing the DST, which was passed into law last year with a delayed application."We're going to stop all negotiations with Canada right now until they straighten out their act," he said. Asked if there's anything Canada can do to appease him, Trump said Ottawa could remove the tax. "They will," he said. "They do most of their business with us. When you have that circumstance, you treat people better." Earlier Friday, Trump posted on social media he may impose some sort of blanket tariff on Canadian goods as retribution for the DST, which will primarily hit U.S. firms since it targets only the biggest earners. Speaking briefly to reporters before Trump's Oval Office comments, Carney said he hadn't talked with Trump that day. "We'll continue to conduct these complex negotiations in the best interest of Canadians," Carney said. He did not address a reporter's question about whether his government is prepared to drop the DST — something the Business Council of Canada is calling on Ottawa to do in exchange for U.S. tariff relief. Set to take effect on June 30, the DST would have U.S. companies like Amazon, Google, Meta, Uber and Airbnb pay a three per cent levy on revenue from Canadian users. The policy will apply retroactively, leaving U.S. companies with a $2-billion US bill due at the end of the month. These global digital firms are often able to skirt paying taxes in the countries where they operate, and the last Liberal government pitched the DST as a way to bring the tax code up to date and capture revenues earned in Canada by firms located abroad. U.S. long opposed DST It's been a bone of contention between Canada and the U.S. for years, with former president Joe Biden's ambassador to Canada warning during his tenure that, if a DST was enacted, the U.S. would hit back. While Canada and other Organization for Economic Co-operation and Development (OECD) countries had been discussing some sort of global DST, the Trudeau government decided to move ahead with its own tax rather than wait for co-ordinated action. Carney's finance minister, François-Philippe Champagne, said last week Ottawa planned to enact the tax even while negotiations with Trump are ongoing. That's what's prompted the president's ire. "We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country," Trump said. WATCH | Foreign Affairs minister on the trade war: As he has done in the past, Trump mischaracterized Canada's tariff regime on U.S. dairy products. The high tariff rates Trump frequently cites are only applied if U.S. exports exceed a set "tariff-rate quota," something that has never happened. Trump's own Department of Agriculture noted earlier this year that almost all agricultural products traded between the United States and Canada are free of tariffs. In an interview with CBC's Power & Politics, Foreign Affairs Minister Anita Anand said supply management, which places limits on certain products, including dairy, to ensure stable prices, is a "cornerstone" Canadian economic policy that is "extremely important." Anand said that despite Trump's threats, Canada will push ahead with trying to broker a deal that's in the best interest of workers and businesses, "while at the same time ensuring we diversify our supply chains so we are never again dependent on one economy." She touted the New EU-Canada Strategic Partnership of the Future that Carney brokered with the European Union earlier this week. Trump's abrupt decision to call off negotiations may have caught Canadian officials off guard. Speaking to CBC Radio's The House hours before Trump's post, Canada-U.S. Trade Minister Dominic LeBlanc said Canada's negotiators "continue to be optimistic about the constructive tone" between the two countries. Still, Candace Laing, president of the Canadian Chamber of Commerce, said there have been signs the "tone and tenor of talks has improved in recent months." Trump and Carney have had two friendly meetings in that time, and she hopes to see "progress continue" despite Trump's apparent attempt to derail the talks. "Negotiations go through peaks and valleys. With deadlines approaching, some last-minute surprises should be expected," Laing said.
Yahoo
4 hours ago
- Business
- Yahoo
Trump wants Canada's digital services tax gone before trade talks resume
U.S. President Donald Trump says he's ending all trade discussions with Canada to hit back at Ottawa for slapping a tax on web giants — and he wants it removed before negotiations can begin again. Canada and the U.S. have been locked in talks to get Trump to lift his punishing tariffs on Canadian goods, levies that have already led to major economic dislocations, job losses and a drop in southbound exports. Trump and Prime Minister Mark Carney agreed at the G7 last week to reach some agreement on the trade dispute within 30 days. Speaking in the Oval Office on Friday afternoon, Trump said the U.S. has "such power over Canada," and that he's upset the country is following a taxation strategy similar to Europe's. "It's not going to work out well for Canada. They were foolish to do it," he said of imposing the DST, which was passed into law last year with a delayed application."We're going to stop all negotiations with Canada right now until they straighten out their act," he said. Asked if there's anything Canada can do to appease him, Trump said Ottawa could remove the tax. "They will," he said. "They do most of their business with us. When you have that circumstance, you treat people better." Earlier Friday, Trump posted on social media he may impose some sort of blanket tariff on Canadian goods as retribution for the DST, which will primarily hit U.S. firms since it targets only the biggest earners. Speaking briefly to reporters before Trump's Oval Office comments, Carney said he hadn't talked with Trump that day. "We'll continue to conduct these complex negotiations in the best interest of Canadians," Carney said. He did not address a reporter's question about whether his government is prepared to drop the DST — something the Business Council of Canada is calling on Ottawa to do in exchange for U.S. tariff relief. Set to take effect on June 30, the DST would have U.S. companies like Amazon, Google, Meta, Uber and Airbnb pay a three per cent levy on revenue from Canadian users. The policy will apply retroactively, leaving U.S. companies with a $2-billion US bill due at the end of the month. These global digital firms are often able to skirt paying taxes in the countries where they operate, and the last Liberal government pitched the DST as a way to bring the tax code up to date and capture revenues earned in Canada by firms located abroad. U.S. long opposed DST It's been a bone of contention between Canada and the U.S. for years, with former president Joe Biden's ambassador to Canada warning during his tenure that, if a DST was enacted, the U.S. would hit back. While Canada and other Organization for Economic Co-operation and Development (OECD) countries had been discussing some sort of global DST, the Trudeau government decided to move ahead with its own tax rather than wait for co-ordinated action. Carney's finance minister, François-Philippe Champagne, said last week Ottawa planned to enact the tax even while negotiations with Trump are ongoing. That's what's prompted the president's ire. "We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country," Trump said. WATCH | Foreign Affairs minister on the trade war: As he has done in the past, Trump mischaracterized Canada's tariff regime on U.S. dairy products. The high tariff rates Trump frequently cites are only applied if U.S. exports exceed a set "tariff-rate quota," something that has never happened. Trump's own Department of Agriculture noted earlier this year that almost all agricultural products traded between the United States and Canada are free of tariffs. In an interview with CBC's Power & Politics, Foreign Affairs Minister Anita Anand said supply management, which places limits on certain products, including dairy, to ensure stable prices, is a "cornerstone" Canadian economic policy that is "extremely important." Anand said that despite Trump's threats, Canada will push ahead with trying to broker a deal that's in the best interest of workers and businesses, "while at the same time ensuring we diversify our supply chains so we are never again dependent on one economy." She touted the New EU-Canada Strategic Partnership of the Future that Carney brokered with the European Union earlier this week. Trump's abrupt decision to call off negotiations may have caught Canadian officials off guard. Speaking to CBC Radio's The House hours before Trump's post, Canada-U.S. Trade Minister Dominic LeBlanc said Canada's negotiators "continue to be optimistic about the constructive tone" between the two countries. Still, Candace Laing, president of the Canadian Chamber of Commerce, said there have been signs the "tone and tenor of talks has improved in recent months." Trump and Carney have had two friendly meetings in that time, and she hopes to see "progress continue" despite Trump's apparent attempt to derail the talks. "Negotiations go through peaks and valleys. With deadlines approaching, some last-minute surprises should be expected," Laing said.
Malaysian Reserve
7 hours ago
- Business
- Malaysian Reserve
Trump ends Canada trade talks in retaliation over digital tax
PRESIDENT Donald Trump said he was ending all trade discussions with Canada in retaliation for the country's digital services tax and threatened to impose a fresh tariff rate within the next week. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. 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,' Trump posted Friday on social media. Treasury Secretary Scott Bessent said on CNBC that he expects the administration will launch a so-called Section 301 investigation into Canada, a tool the US has used against other countries including China, which may lead to higher import taxes. Canada and the US have one of the world's largest bilateral trading relationships, exchanging more than $900 billion of goods and services last year. But the alliance has grown tense since Trump won the election. The president threatened 25% tariffs on imports from Canada and repeatedly said he thinks it should become the 51st US state. Since taking office, he has put taxes on steel, aluminum and automobiles and other goods. In response, many Canadians have boycotted US products and avoided travel to US destinations. Canadian Prime Minister Mark Carney, speaking briefly on his way out of a meeting on Friday, said he hadn't spoken with Trump since his post. 'We'll continue to conduct these complex negotiations in the best interests of Canadians,' he said. The Canadian dollar dropped more than 0.5% almost immediately after Trump's post before reversing those losses. Canada's benchmark equity index fell, ending the day down 0.2%, and the shares of companies that rely on moving goods across the border, including General Motors Co. and apparel maker Canada Goose Holdings Inc., also took a hit. Dozens of countries face a July 9 deadline for Trump's higher tariffs to kick back into place, and have been engaged in negotiations with the US. That deadline doesn't apply to Canada and Mexico. The president imposed tariffs on the US's North American neighbors earlier this year over fentanyl trafficking and migration concerns, and talks with them are being handled on a separate track. Last week, Trump and Carney met at the Group of Seven leaders' summit and agreed to try to hash out an agreement by the middle of July. Business groups and some politicians quickly applied pressure on Carney to drop the digital tax. 'In an effort to get trade negotiations back on track, Canada should put forward an immediate proposal to eliminate the DST in exchange for an elimination of tariffs from the United States,' said Goldy Hyder, chief executive officer of the Business Council of Canada. Ontario Premier Doug Ford reiterated his call for the prime minister to abandon the digital tax. 'We've long supported the idea that global tech giants should pay their fair share in the countries where they operate. But the digital services tax hasn't achieved that,' the Council of Canadian Innovators, which represents technology executives, said in a statement. 'It's functionally a pass-through cost paid by Canadian advertisers and consumers, and it leaves our economy exposed to draconian trade retaliation.' Bessent on Thursday announced a deal with other G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the Section 899 'revenge tax' from the administration's tax bill. However, the deal didn't address digital services taxes, which are in place in a number of countries but are opposed by Trump and his officials. Canada's digital tax isn't new. It was passed into law a year ago but companies haven't had to pay it yet. The government will proceed with implementing it, with the first payments due Monday, Canada's finance department said earlier Friday, before Trump's post. Business groups had warned it would increase the cost of services and invite retaliation by the US. A group of 21 US lawmakers wrote to Trump earlier this month asking him to push for the tax's removal, estimating it will cost American companies $2 billion. Trump has long railed against taxes and other non-tariff barriers, casting them as an impediment to US exporters. 'We were hoping as a sign of goodwill that the new Carney administration would at least put a brake on that during the trade talks,' Bessent said on CNBC. 'They seem not to have.' The US specifically asked for a 30-day delay in the tax when Trump and Carney met at the G-7, according to Kevin Hassett, Trump's National Economic Council Director, who spoke Friday in an interview with Fox Business. The Canadian digital services tax is similar to those implemented by other countries, including the UK. The levy is 3% of the digital services revenue that a firm makes from Canadian users above C$20 million ($14.6 million) in a year. It would apply to megacap technology companies including Meta Platforms Inc., Alphabet Inc. and Inc. and has been criticized by smaller players including Uber Technologies Inc. and Etsy Inc. 'We are disappointed by the Canadian government's decision to implement a discriminatory tax that will harm Canadian consumers, and we hope that this matter can be quickly resolved,' a spokesperson for Amazon said in an emailed statement. Canadian Finance Minister Francois-Philippe Champagne suggested last week that the digital tax may be renegotiated as part of US-Canada trade discussions. 'Obviously, all of that is something that we're considering as part of broader discussions that you may have,' he said. –BLOOMBERG
Yahoo
8 hours ago
- Business
- Yahoo
Trump wants Canada's digital services tax gone before trade talks resume
U.S. President Donald Trump says he's ending all trade discussions with Canada to hit back at Ottawa for slapping a tax on web giants — and he wants it removed before negotiations can begin again. Canada and the U.S. have been locked in talks to get Trump to lift his punishing tariffs on Canadian goods, levies that have already led to major economic dislocations, job losses and a drop in southbound exports. Trump and Prime Minister Mark Carney agreed at the G7 last week to reach some agreement on the trade dispute within 30 days. Speaking in the Oval Office on Friday afternoon, Trump said the U.S. has "such power over Canada," and that he's upset the country is following a taxation strategy similar to Europe's. "It's not going to work out well for Canada. They were foolish to do it," he said of imposing the DST, which was passed into law last year with a delayed application."We're going to stop all negotiations with Canada right now until they straighten out their act," he said. Asked if there's anything Canada can do to appease him, Trump said Ottawa could remove the tax. "They will," he said. "They do most of their business with us. When you have that circumstance, you treat people better." Earlier Friday, Trump posted on social media he may impose some sort of blanket tariff on Canadian goods as retribution for the DST, which will primarily hit U.S. firms since it targets only the biggest earners. Speaking briefly to reporters before Trump's Oval Office comments, Carney said he hadn't talked with Trump that day. "We'll continue to conduct these complex negotiations in the best interest of Canadians," Carney said. He did not address a reporter's question about whether his government is prepared to drop the DST — something the Business Council of Canada is calling on Ottawa to do in exchange for U.S. tariff relief. Set to take effect on June 30, the DST would have U.S. companies like Amazon, Google, Meta, Uber and Airbnb pay a three per cent levy on revenue from Canadian users. The policy will apply retroactively, leaving U.S. companies with a $2-billion US bill due at the end of the month. These global digital firms are often able to skirt paying taxes in the countries where they operate, and the last Liberal government pitched the DST as a way to bring the tax code up to date and capture revenues earned in Canada by firms located abroad. U.S. long opposed DST It's been a bone of contention between Canada and the U.S. for years, with former president Joe Biden's ambassador to Canada warning during his tenure that, if a DST was enacted, the U.S. would hit back. While Canada and other Organization for Economic Co-operation and Development (OECD) countries had been discussing some sort of global DST, the Trudeau government decided to move ahead with its own tax rather than wait for co-ordinated action. Carney's finance minister, François-Philippe Champagne, said last week Ottawa planned to enact the tax even while negotiations with Trump are ongoing. That's what's prompted the president's ire. "We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country," Trump said. WATCH | Foreign Affairs minister on the trade war: As he has done in the past, Trump mischaracterized Canada's tariff regime on U.S. dairy products. The high tariff rates Trump frequently cites are only applied if U.S. exports exceed a set "tariff-rate quota," something that has never happened. Trump's own Department of Agriculture noted earlier this year that almost all agricultural products traded between the United States and Canada are free of tariffs. In an interview with CBC's Power & Politics, Foreign Affairs Minister Anita Anand said supply management, which places limits on certain products, including dairy, to ensure stable prices, is a "cornerstone" Canadian economic policy that is "extremely important." Anand said that despite Trump's threats, Canada will push ahead with trying to broker a deal that's in the best interest of workers and businesses, "while at the same time ensuring we diversify our supply chains so we are never again dependent on one economy." She touted the New EU-Canada Strategic Partnership of the Future that Carney brokered with the European Union earlier this week. Trump's abrupt decision to call off negotiations may have caught Canadian officials off guard. Speaking to CBC Radio's The House hours before Trump's post, Canada-U.S. Trade Minister Dominic LeBlanc said Canada's negotiators "continue to be optimistic about the constructive tone" between the two countries. Still, Candace Laing, president of the Canadian Chamber of Commerce, said there have been signs the "tone and tenor of talks has improved in recent months." Trump and Carney have had two friendly meetings in that time, and she hopes to see "progress continue" despite Trump's apparent attempt to derail the talks. "Negotiations go through peaks and valleys. With deadlines approaching, some last-minute surprises should be expected," Laing said.
Canada Standard
9 hours ago
- Business
- Canada Standard
US President Donald Trump terminates trade talks with Canada
Washington DC [US], June 28 (ANI): US President Donald Trump announced on Friday (US local time) that the United States will be terminating all discussions on trade with Canada, effective immediately. In a post on Truth Social, Trump called Canada a 'very difficult' country to trade with. He pointed out that the Digital Services Tax announced by the Canadian government is a blatant attack on America and its businesses. 'We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400 per cent Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country. They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us,' US President said. The Government of Canada has introduced the digital services tax (DST). The DST requires foreign and domestic large businesses to pay tax on certain revenue earned from engaging with online users in Canada if they meet certain conditions, as per a statement issued by the Canadian Revenue Agency. Trump further said that Canada will be informed about the tariffs they will have to pay to do business with the US within the next seven days. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. 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. Thank you for your attention to this matter!' he wrote. According to CNN, DST allows countries to collect revenue from large companies that operate online, even if their business is unprofitable. Citing a report published by the nonpartisan Congressional Research Service, CNN noted that American firms, particularly big tech companies like Meta, Apple, Google, Amazon and Microsoft, are disproportionately affected by DSTs. CNN reported that the US President had taken up the issue of DSTs in the trade negotiations with other countries and had referred to them as 'non-tariff trade barriers.' It further reported that Canada has a new DST, which is set to come into effect from Monday and would be retroactive to 2022. As per the New York Times, Canada's 3 per cent digital services tax has been in place since last year, but the first payments are only due beginning on Monday. Since the tax is retroactive in nature, American companies were preparing to turn over roughly USD 2.7 billion to the Canadian government, the NYT noted, citing a trade group for large tech companies. (ANI)
