Latest news with #USMCA
NDTV
12 hours ago
- Business
- NDTV
Digital Services Tax: Trump's Latest Beef With Canada
New Delhi: US President Donald Trump is once again going after Canada. He has announced through Truth Social that he is "terminating all discussions on trade" with Canada with immediate effect. The reason for his tirade this time is the Digital Services Tax. The Digital Services Tax was enacted last year, but companies are expected to start paying the tax from June 30. And since it will directly impact the big tech companies and large e-commerce platforms headquartered in the US, President Trump is seeing red. What is the Digital Services Tax The Digital Services Tax requires foreign and domestic large businesses to pay revenue tax that is earned from engaging with online users in Canada. It applies a three per cent tax on revenue earned from some digital services that rely on engagement, data, and content contributions. So, the taxable revenue could be generated through online marketplace services, online advertising services, social media services, and sales of user data. The Digital Services Tax will apply to companies or groups with annual global revenues of €750 million or more and Canadian digital services revenue of more than CAD 20 million. Significantly, the tax is retroactive to January 1, 2022, and companies will start paying the tax on June 30, 2025. Canada's rationale vs US pushback The overarching premise of the Digital Services Tax is that if big companies, that are based abroad, are earning significant revenue from Canadian users, then Canada should be able to tax a portion of that income. The revenue that Canada would make from the Digital Services Tax is expected to be around $875 million per year, said a note from the US Trade Representative last year. Over five years, the Digital Services Tax will increase federal government revenues by CAD 7.2 billion, per the Canadian Parliamentary Budget Office. The Computer and Communications Industry Association (CCIA) in the US claims that companies will end up paying up to $3 billion in taxes to Canada. It is also predicting 3,000 US job losses. What has been US' response in the past The US Trade Representative (USTR) had previously investigated Digital Services Tax in other countries and said that it had found them discriminatory toward US companies. The US had announced plans for retaliatory tariffs against the countries with Digital Services Tax and had said it would use the same yardstick for Canada. In August 2024, USTR Katherine Tai announced that the United States had requested dispute settlement consultations with Canada under the United States-Mexico-Canada Agreement (USMCA or CUSMA) regarding Canada's Digital Services Tax. The USTR had alleged that Canada's tax appeared to be inconsistent with its commitments under the Cross-Border Trade in services and investment chapters of the USMCA, not to treat US businesses less favourably than Canadian businesses. The US said that it had raised the concern with Canada in three official comments about its plan to enact a Digital Services Tax in June 2021, February 2022, and in September 2023. The US Chambers of Commerce has called the Digital Services Tax "discriminatory" and said that it is in contravention of prevailing international tax principles. It adds that doing so would not only discriminate against US companies but also directly contravene Canada's obligations under both the US-Mexico-Canada Agreement (USMCA) and the World Trade Organisation. Hence, President Trump's reaction to the Digital Services Tax as the date of payment closes in is hardly a surprise. Why is Canada not flinching yet on Digital Services Tax Earlier this month, Canadian Finance Minister Francois-Philippe Champagne had said the Digital Services Tax was passed by Parliament, and the government would hence go ahead with the tax. The reason why Canada went ahead and implemented its own Digital Services Tax was that the global effort to establish a broader, multinational digital taxation plan had been woefully delayed. Some argue that the Digital Services Tax is a unilateral measure that would undermine the stability of the agreed multilateral framework. However, with the Trump administration imposing unilateral tariffs - from aluminum and steel to automobiles and energy, against Canada - this argument is unlikely to move Canada. At a time when Canada feels betrayed by its largest trading partner, the United States, and is already reeling under the onslaught of the punishing Trump tariffs, it is beginning to assert its economic leverage. And the Digital Services Tax could perhaps serve as a negotiating tool in the process.
Economic Times
17 hours ago
- Business
- Economic Times
Carney vs Trump: President shuts down trade talks with Canada, tariff announcement coming in 7 days
Carney vs Trump escalated on June 27, 2025, after President Donald Trump abruptly ended U.S.–Canada trade talks, following Ottawa's announcement of a 3% Digital Services Tax on American tech firms like Google, Meta, and Amazon. Trump called it a 'direct and blatant attack' and promised to announce new U.S. tariffs on Canadian imports within 7 days. He highlighted Canada's long-standing 400% tariffs on U.S. dairy exports, signaling retaliation. With over $900 billion in U.S.–Canada trade annually, this move could trigger massive economic shifts. Trump ends trade talks with Canada over new 3% digital tax on U.S. tech giants like Google and Meta; threatens tariffs within 7 days, citing 400% Canadian dairy taxes. $900B U.S.–Canada trade now facing major 2025 disruption. Tired of too many ads? Remove Ads What triggered Trump's decision to cut off trade talks with Canada? More than €750 million (approx. USD $802 million) in global revenue, and At least CAD $20 million (approx. USD $14.6 million) annually in Canadian digital services revenue. Alphabet (Google) – $307 billion in global revenue (2024) – $307 billion in global revenue (2024) Meta Platforms (Facebook, Instagram) – $134 billion in global revenue (2024) – $134 billion in global revenue (2024) Amazon – $575 billion in global revenue (2024) – $575 billion in global revenue (2024) Uber Technologies – $38 billion in global revenue (2024) Tired of too many ads? Remove Ads Carney vs Trump is heating up fast after President Donald Trump officially shut down trade talks with Canada, slamming the country for its new Digital Services Tax targeting U.S. tech giants. Trump announced that tariffs on Canadian imports will be revealed in 7 days, sparking fears of a new trade war. What other trade grievances does Trump have with Canada? Canadian tariffs on U.S. milk, cheese, and other dairy products have reached up to 400% under Canada's supply management system. The U.S. dairy industry exported over $7.8 billion globally in 2024, but sales to Canada have remained flat due to high barriers. In contrast, Canada exported $453 million in dairy to the U.S. in 2024 under favorable access through the USMCA (United States-Mexico-Canada Agreement). What happens next: Will Trump impose tariffs on Canadian goods? '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.' Sector 2024 Exports to U.S. Possible Tariff Risk Automobiles $62 billion High Aluminum & Steel $13 billion High Dairy & Agriculture $4.6 billion Moderate Lumber $8.3 billion Moderate Pharmaceuticals $3.1 billion Low Tired of too many ads? Remove Ads How are markets and politicians reacting to the trade freeze? The Canadian dollar dropped 0.7% against the U.S. dollar on June 27 after Trump's announcement. U.S. tech stocks slid: Meta (META) fell 1.9% Alphabet (GOOGL) dropped 2.1% Amazon (AMZN) declined 1.5% The S&P 500 closed down 0.3%, led by tech losses. 'The digital economy has grown rapidly. It's only fair that companies profiting off Canadian users also pay a fair share of taxes here.' Is this the beginning of another North American trade war? New Canadian countermeasures on U.S. tech, agriculture, or energy exports. Legal disputes under USMCA's dispute settlement mechanism. Slowdown in cross-border investment, which reached $972 billion in 2024 between the two countries. Over $30 billion in retaliatory tariffs A $6.6 billion loss for U.S. farmers Temporary shutdowns of auto plants in Ontario and Michigan What's at stake in Trump vs Carney? FAQs: The story escalated quickly on Friday when President Donald J. Trump announced the termination of all trade talks with Canada, calling it a 'very difficult Country to TRADE with.' The move comes after Canada officially passed its Digital Services Tax (DST) into law, aimed at American tech giants operating in its digital made the announcement via Truth Social at 1:44 PM EST on June 27, 2025, warning that a new U.S. tariff on Canadian imports will be finalized and announced within 7 days, by July 4, immediate flashpoint was Canada's implementation of a 3% Digital Services Tax. This new tax applies to companies that earn:This tax is retroactively effective from January 1, 2022, meaning companies could owe three years' worth of back payments. It primarily targets U.S.-based tech giants, including:Canada's DST closely resembles similar laws in the, which have been a long-standing source of trade tension with the response, Trump called the move 'a direct and blatant attack on our Country,' and claimed it mirrors the EU's tax structure, which is also under dispute with the United the digital tax, Trump revisited a long-standing economic complaint—Canada's dairy tariffs. According to the Trump administration:Trump claims this imbalance has cost American farmers millions in potential revenue each also referenced prior grievances dating back to his 2018–2020 trade wars, when tariffs were imposed on Canadian steel (25%) and aluminum (10%), leading to significant retaliation from to Trump's Truth Social post:No tariff details were released yet, but based on past patterns, the following Canadian sectors are at risk:In total, Canada exported $397 billion worth of goods to the U.S. in 2024, accounting for over 75% of its total exports. Any significant U.S. tariff could hit the Canadian economy hard, potentially triggering a GDP contraction of up to 1.1%, according to a March 2025 report by the Bank of markets responded with caution:On the political front, Canadian Prime Minister Mark Carney has yet to respond publicly. However, Chrystia Freeland, Canada's Deputy PM and Finance Minister, defended the tax earlier this week, saying:Back in Washington,andgroups warned that escalating trade tensions could hurt American consumers by increasing costs for imported decision to cut off trade talks mirrors Trump's 2018–2019 approach, where aggressive tariffs were used to pressure allies and adversaries alike. The difference now is the focus on digital services, not just traditional administration is expected to release a formal tariff list by July 4, 2025—possibly on the symbolic day of American independence. Trade policy experts suggest tariffs could range from 10% to 35%, depending on the isn't just a spat over taxes. It's a broader fight over how global tech profits are taxed, and who controls the digital economy. Trump's move to shut down talks sends a clear signal that the U.S. is prepared to act unilaterally—even against close billions of dollars and political capital at stake, the next week will be critical. The world is watching how Prime Minister Carney responds and whether Trump follows through with hard then, business leaders, investors, and everyday workers on both sides of the border are bracing for what could become the biggest U.S.–Canada trade dispute of the Canada imposed a 3% digital tax on U.S. tech companies like Google, Meta, and said a new U.S. tariff—following Canada's 400% dairy tariff—will be announced by July 4, 2025.
India Today
19 hours ago
- Business
- India Today
Trump halts trade talks with Canada over digital tax, threatens new tariffs
US President Donald Trump announced Friday that the United States is immediately ending all trade talks with Canada, citing the country's digital services tax as the reason for the abrupt a post on Truth Social, Trump called the tax "a direct and blatant attack on our country" and accused Canada of mirroring similar measures implemented by the European Union. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,' Trump president added that his administration would notify Canada within the next seven days of the new tariffs it will face to continue doing business with the United States. The digital services tax, which took effect in June 2024, imposes a 3% levy on revenues earned by large companies from digital services provided to Canadian users. The measure applies to online advertising, social media platforms, digital marketplaces, and sales involving user data. The first tax payments are scheduled to be collected on further criticized Canada's overall trade practices, calling it 'a very difficult Country to TRADE with,' and claimed that Canadian tariffs on US dairy products can reach as high as 400 per move to terminate trade talks comes amid ongoing tensions between the two countries, following a series of tariffs imposed by the Trump administration earlier this responded with retaliatory duties on American goods. Although both sides have expressed a desire to renegotiate their trade framework, progress has US-Mexico-Canada Agreement (USMCA), negotiated during Trump's first term, is scheduled for review and possible renegotiation by 2026. However, Trump and Canadian Prime Minister Mark Carney had previously aimed to reach a revised agreement by July 21, 2025.- EndsTune InMust Watch
Time of India
20 hours ago
- Business
- Time of India
Carney vs Trump: President shuts down trade talks with Canada, tariff announcement coming in 7 days
Carney vs Trump escalated on June 27, 2025, after President Donald Trump abruptly ended U.S.–Canada trade talks, following Ottawa's announcement of a 3% Digital Services Tax on American tech firms like Google, Meta, and Amazon. Trump called it a 'direct and blatant attack' and promised to announce new U.S. tariffs on Canadian imports within 7 days. He highlighted Canada's long-standing 400% tariffs on U.S. dairy exports, signaling retaliation. With over $900 billion in U.S.–Canada trade annually, this move could trigger massive economic shifts. Trump ends trade talks with Canada over new 3% digital tax on U.S. tech giants like Google and Meta; threatens tariffs within 7 days, citing 400% Canadian dairy taxes. $900B U.S.–Canada trade now facing major 2025 disruption. Tired of too many ads? Remove Ads What triggered Trump's decision to cut off trade talks with Canada? More than €750 million (approx. USD $802 million) in global revenue, and At least CAD $20 million (approx. USD $14.6 million) annually in Canadian digital services revenue. Alphabet (Google) – $307 billion in global revenue (2024) – $307 billion in global revenue (2024) Meta Platforms (Facebook, Instagram) – $134 billion in global revenue (2024) – $134 billion in global revenue (2024) Amazon – $575 billion in global revenue (2024) – $575 billion in global revenue (2024) Uber Technologies – $38 billion in global revenue (2024) Tired of too many ads? Remove Ads Carney vs Trump is heating up fast after President Donald Trump officially shut down trade talks with Canada, slamming the country for its new Digital Services Tax targeting U.S. tech giants. Trump announced that tariffs on Canadian imports will be revealed in 7 days, sparking fears of a new trade war. What other trade grievances does Trump have with Canada? Canadian tariffs on U.S. milk, cheese, and other dairy products have reached up to 400% under Canada's supply management system. The U.S. dairy industry exported over $7.8 billion globally in 2024, but sales to Canada have remained flat due to high barriers. In contrast, Canada exported $453 million in dairy to the U.S. in 2024 under favorable access through the USMCA (United States-Mexico-Canada Agreement). What happens next: Will Trump impose tariffs on Canadian goods? '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.' Sector 2024 Exports to U.S. Possible Tariff Risk Automobiles $62 billion High Aluminum & Steel $13 billion High Dairy & Agriculture $4.6 billion Moderate Lumber $8.3 billion Moderate Pharmaceuticals $3.1 billion Low Tired of too many ads? Remove Ads How are markets and politicians reacting to the trade freeze? The Canadian dollar dropped 0.7% against the U.S. dollar on June 27 after Trump's announcement. U.S. tech stocks slid: Meta (META) fell 1.9% Alphabet (GOOGL) dropped 2.1% Amazon (AMZN) declined 1.5% The S&P 500 closed down 0.3%, led by tech losses. 'The digital economy has grown rapidly. It's only fair that companies profiting off Canadian users also pay a fair share of taxes here.' Is this the beginning of another North American trade war? New Canadian countermeasures on U.S. tech, agriculture, or energy exports. Legal disputes under USMCA's dispute settlement mechanism. Slowdown in cross-border investment, which reached $972 billion in 2024 between the two countries. Over $30 billion in retaliatory tariffs A $6.6 billion loss for U.S. farmers Temporary shutdowns of auto plants in Ontario and Michigan What's at stake in Trump vs Carney? FAQs: The story escalated quickly on Friday when President Donald J. Trump announced the termination of all trade talks with Canada, calling it a 'very difficult Country to TRADE with.' The move comes after Canada officially passed its Digital Services Tax (DST) into law, aimed at American tech giants operating in its digital made the announcement via Truth Social at 1:44 PM EST on June 27, 2025, warning that a new U.S. tariff on Canadian imports will be finalized and announced within 7 days, by July 4, immediate flashpoint was Canada's implementation of a 3% Digital Services Tax. This new tax applies to companies that earn:This tax is retroactively effective from January 1, 2022, meaning companies could owe three years' worth of back payments. It primarily targets U.S.-based tech giants, including:Canada's DST closely resembles similar laws in the, which have been a long-standing source of trade tension with the response, Trump called the move 'a direct and blatant attack on our Country,' and claimed it mirrors the EU's tax structure, which is also under dispute with the United the digital tax, Trump revisited a long-standing economic complaint—Canada's dairy tariffs. According to the Trump administration:Trump claims this imbalance has cost American farmers millions in potential revenue each also referenced prior grievances dating back to his 2018–2020 trade wars, when tariffs were imposed on Canadian steel (25%) and aluminum (10%), leading to significant retaliation from to Trump's Truth Social post:No tariff details were released yet, but based on past patterns, the following Canadian sectors are at risk:In total, Canada exported $397 billion worth of goods to the U.S. in 2024, accounting for over 75% of its total exports. Any significant U.S. tariff could hit the Canadian economy hard, potentially triggering a GDP contraction of up to 1.1%, according to a March 2025 report by the Bank of markets responded with caution:On the political front, Canadian Prime Minister Mark Carney has yet to respond publicly. However, Chrystia Freeland, Canada's Deputy PM and Finance Minister, defended the tax earlier this week, saying:Back in Washington,andgroups warned that escalating trade tensions could hurt American consumers by increasing costs for imported decision to cut off trade talks mirrors Trump's 2018–2019 approach, where aggressive tariffs were used to pressure allies and adversaries alike. The difference now is the focus on digital services, not just traditional administration is expected to release a formal tariff list by July 4, 2025—possibly on the symbolic day of American independence. Trade policy experts suggest tariffs could range from 10% to 35%, depending on the isn't just a spat over taxes. It's a broader fight over how global tech profits are taxed, and who controls the digital economy. Trump's move to shut down talks sends a clear signal that the U.S. is prepared to act unilaterally—even against close billions of dollars and political capital at stake, the next week will be critical. The world is watching how Prime Minister Carney responds and whether Trump follows through with hard then, business leaders, investors, and everyday workers on both sides of the border are bracing for what could become the biggest U.S.–Canada trade dispute of the Canada imposed a 3% digital tax on U.S. tech companies like Google, Meta, and said a new U.S. tariff—following Canada's 400% dairy tariff—will be announced by July 4, 2025.
New York Post
20 hours ago
- Business
- New York Post
Trump abruptly ends trade talks with Canada over digital services tax: ‘Direct and blatant attack on our Country'
WASHINGTON — President Trump unexpectedly announced Friday that he was 'terminating' trade talks with Canada due to a looming digital services tax targeting large American companies. 'We have just been informed that Canada … 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 wrote on Truth Social. President Trump announced the immediate termination of trade talks with Canada due to a looming digital services tax. AP Advertisement 'They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.' Trump added: '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!' President Donald Trump took to Truth Social to say the US are ending trade talks with Canada over a digital services tax. realDonaldTrump/X Advertisement Canada is moving forward with plans to slap a 3% tax on revenue generated by platforms like Facebook and Google — with looming tax bills made retroactive to 2022 and applicable to firms that rake in more than $14.6 million per year. The immediate impact of Trump's announcement was unclear — in part because much of the US-Canada relationship is governed by the USMCA trade deal. The announcement did cause stock prices to drop on Wall Street, though the markets were still on course for a winning end to the week. Trump previously threatened to slap a 50% duty on the European Union over its digital services tax, but delayed implementation until July 9 to allow time for negotiations.
