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Malay Mail
an hour ago
- Business
- Malay Mail
Trump halts Canada trade talks over digital tax on US tech giants, tariffs to be announced within a week
WASHINGTON, June 28 — President Donald Trump said yesterday he is calling off trade negotiations with Canada in retaliation for taxes impacting US tech firms, adding that Ottawa will learn of their new tariff rate within a week. Trump was referring to Canada's digital services tax, which was enacted last year and forecast to bring in CA$5.9 billion (RM17.76 billion) over five years. While the measure is not new, US service providers will be 'on the hook for a multi-billion dollar payment in Canada' come June 30, noted the Computer & Communications Industry Association recently. The three percent tax applies to large or multinational companies such as Alphabet, Amazon and Meta that provide digital services to Canadians, and Washington has previously requested dispute settlement talks over the matter. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,' Trump said in a post on his Truth Social platform Friday. Canada may have been spared some of Trump's sweeping duties, but it faces a separate tariff regime. Trump has also imposed steep levies on imports of steel, aluminium and autos. Last week, Canadian Prime Minister Mark Carney said Ottawa will adjust its 25 percent counter tariffs on US steel and aluminium — in response to a doubling of US levies on the metals to 50 percent — if a bilateral trade deal was not reached in 30 days. 'We will continue to conduct these complex negotiations in the best interest of Canadians,' Carney said Friday, adding that he had not spoken to Trump on the day. US Treasury Secretary Scott Bessent told CNBC that Washington had hoped Carney's government would halt the tax 'as a sign of goodwill.' He now expects US Trade Representative Jamieson Greer to start a probe to determine the harm stemming from Canada's digital tax. China progress Trump's salvo targeting Canada came shortly after Washington and Beijing confirmed finalising a framework to move forward on trade. A priority for Washington in talks with Beijing had been ensuring the supply of the rare earths essential for products including electric vehicles, hard drives and national defence equipment. China, which dominates global production of the elements, began requiring export licences in early April, a move widely viewed as a response to Trump's blistering tariffs. Both sides agreed after talks in Geneva in May to temporarily lower steep tit-for-tat duties on each other's products. China also committed to easing some non-tariff countermeasures but US officials later accused Beijing of violating the pact and slow-walking export licence approvals for rare earths. They eventually agreed on a framework to move forward with their Geneva consensus, following talks in London this month. A White House official told AFP on Thursday that the Trump administration and China had 'agreed to an additional understanding for a framework to implement the Geneva agreement.' This clarification came after the US president told an event that Washington had inked a deal relating to trade with China, without providing details. Under the deal, China 'will review and approve applications for the export control items that meet the requirements in accordance with the law,' China's commerce ministry said. 'The US side will correspondingly cancel a series of restrictive measures against China,' it added. Upcoming deals? Dozens of economies, although not China, face a July 9 deadline for steeper duties to kick in — rising from a current 10 percent. It remains to be seen if countries will successfully reach agreements to avoid them before the deadline. On talks with the European Union, for example, Trump told an event at the White House on Friday: 'We have the cards. We have the cards far more than they do.' But Bessent said Washington could wrap up its agenda for trade deals by September, indicating more agreements could be concluded, although talks were likely to extend past July. Bessent told Fox Business there are 18 key partners Washington is focused on pacts with. 'If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day,' Bessent said, referring to the US holiday on September 1. Wall Street's major indexes finished at fresh records as markets cheered progress in US-China trade while shrugging off concerns about Canada. — AFP
Yahoo
an hour 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.
ABC News
an hour ago
- Business
- ABC News
Trump cuts off US trade talks with Canada, shattering optimism over tariff deals
US President Donald Trump has abruptly cut off trade talks with Canada over its tax targeting US technology firms, calling it a "blatant attack". The move on Friday, local time, plunged US-Canada relations back into chaos after a period of relative calm that included a cordial G7 meeting in mid-June where Mr Trump and Canadian Prime Minister Mark Carney agreed to wrap up a new economic agreement within 30 days. It also came just hours after US Treasury Secretary Scott Bessent struck an upbeat tone on trade, touting that progress had been made with China on reviving the flow of critical minerals for the US manufacturing sector, and in other key tariff negotiations. The often-chaotic rollout of Mr Trump's import levies since his return to office this year has frequently whipsawed financial markets, and have begun to weigh on consumer spending, the bedrock of the US economy. US stocks were briefly batted lower by his broadside against Canada, but the S&P 500 and Nasdaq managed to close out the week at record highs. Mr Trump's action comes ahead of Canada's plans to begin collecting on Monday a previously enacted digital services tax on US technology firms, including Amazon, Meta, Alphabet's Google and Apple, among others. The tax is 3 per cent of the digital services revenue a firm takes in from Canadian users above $US20 million ($30 million) in a calendar year, and payments will be retroactive to 2022. Mr Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with". "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." Speaking to reporters at the White House, Mr Trump said that the negotiations with Canada would not resume "until they straighten out their act," adding that the US holds "such power over Canada". Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $US349.4 billion of US goods last year and exported $US412.7 billion to the US, according to US Census Bureau data. Mr Carney's office responded to Mr Trump's announcement by saying: "The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses." Mr Bessent sought to downplay the US-Canadian dispute in a CNBC interview, saying US Trade Representative (USTR) Jamieson Greer would likely open a Section 301 probe into Canada's digital tax that would clear the way for tariff retaliation in the amount of harm to US firms, which he said was roughly $US2 billion. The US has prepared similar retaliation against European countries that have imposed digital taxes. A USTR spokesperson did not immediately respond to a request for comment. Earlier on Friday, Mr Bessent said the Trump administration's various trade deals with other countries could be done by the September 1 Labor Day holiday, citing talks with 18 top trade partners and another revision to a deal with China to reopen the flow of rare earth minerals and magnets. After a week where tariffs took a back seat to the US strike on Iran's nuclear facilities and the massive tax and spending bill in the US Congress, the Trump administration's trade negotiations have picked up. The US sent a new proposal to the European Union on Thursday and India sent a delegation to Washington for more talks. "So we have countries approaching us with very good deals," Mr Bessent said on Fox Business Network. "We have 18 important trading partners. … If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Mr Bessent said. He did not mention any changes to a July 9 deadline for countries to reach deals with the US or see tariffs spike higher, but Mr Trump said at the White House that he could extend the tariff deadline or "make it shorter". Mr Trump said that he would notify countries of their tariff rates within the next week and a half, adding: "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent." Mr Bessent said the US and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to America, further modifying a deal reached in May in Geneva. As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, up-ending supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. During US-China talks in May in Geneva, Beijing committed to removing the measures imposed since April 2, but those critical materials were not moving as fast as agreed, Mr Bessent said, so the US put countermeasures in place. "I am confident now that … as agreed, the magnets will flow," Mr Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis. He later said that the US would begin shipping withheld materials to China when the rare earths shipments resumed. China's Commerce Ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths. Trump administration officials also held trade talks on Friday with India and Japan, two other countries in advanced negotiations with the US The Japanese government said in a statement that the two sides will continue to work to "reach an agreement that benefits both Japan and the United States". Reuters
Time of India
2 hours ago
- Business
- Time of India
‘Continue to conduct negotiations': Canada vows calm after Trump's shock exit from trade talks
US President Trump abruptly ended trade talks with Canada on June 27, calling its digital services tax a 'blatant attack' on US tech giants. Trump threatened new tariffs on Canadian goods within a week, reigniting trade tensions after recent G7 cooperation. Canadian PM Mark Carney vowed to continue negotiations, stressing they're in the best interests of Canadian workers and businesses. Canada is the US's second-largest trading partner, with deep economic ties. Show more Show less
National Post
2 hours ago
- Business
- National Post
Don Braid: Smith's warnings about Alberta separatism is really about keeping UCP in power
Separatism is no threat to Alberta, or the federal government, or Canada itself. Article content But it is an enormous threat to Premier Danielle Smith and her United Conservative Party. Article content A provincewide vote of, say five per cent, would bleed support from the UCP and bring the NDP back to power. Article content That threat drives major elements of UCP policy, from removing books in schools to making nine demands for change from Ottawa. Article content Article content The UCP often governs 4.9 million Albertans for the benefit of a faction within the party. Article content Article content At an event with federal Transport Minister Chrystia Freeland on Thursday, Smith said Prime Minister Mark Carney should take separatism seriously. It's the fed's fault, after all. Article content 'If Ottawa wants to work with me to cause that (separatist) sentiment to subside, then we need to materially address the nine bad laws that have created that negative investment climate,' she said. Article content 'If they make the changes that we're requesting, then I suspect they can take the air out of that movement.' Article content Knocking a few points off a tiny separatist party's support is a weak rationale for moving the feds to action. Article content There isn't much of a market in Ottawa, or anywhere else, for the plaintive cries from Alberta the Oppressed. Article content On Friday, the government closed the books on fiscal 2024-25 with an astonishing surplus of $8.2 billion. Article content Originally, the finance department had forecast a surplus of 'only' $355 million (one that every other province would love to have). Article content Article content That surplus grew madly because of lush revenue in major categories, especially oil and gas. Article content Article content In 2023-24, the Alberta surplus was $4.3 billion; the year before that, it hit $11.6 billion. The only other province to book a surplus in 2024-25 was New Brunswick, with $41 million.
