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CTV News
2 days ago
- Business
- CTV News
Canada ‘caved' to U.S. by dropping tax, White House says
The United States will resume trade negotiations with Canada immediately after Ottawa scrapped its digital services tax targeting U.S. technology firms, White House economic adviser Kevin Hassett said on Monday. 'Absolutely,' Hassett said on Fox News Channel when asked about the talks restarting. White House press secretary Karoline Leavitt told reporters that Canadian Prime Minister Mark Carney called U.S. President Donald Trump on Sunday evening to tell him the tax was being dropped, calling it a big victory for U.S. tech companies. 'Very simple. Prime Minister Carney in Canada caved to President Trump and the United States of America,' she said, crediting Trump's hard-line negotiating style for the shift. 'President Trump knows ... that every country on the planet needs to have good trade relationships with the United States, and it was a mistake for Canada to vow to implement that tax that would have hurt our tech companies here in the United States,' she said. Trump had asked Canada to drop the tax at a G7 meeting in Canada earlier in June, Hassett said. 'It's something that they've studied, now they've agreed to, and for sure, that means that we can get back to the negotiations.' Canada halted its plans to begin collecting a new digital services tax targeting U.S. technology firms just hours before this was due to start on Monday in a bid to advance stalled trade negotiations with the U.S. Canada's finance ministry said late on Sunday that Carney and Trump would resume trade negotiations in order to agree on a deal by July 21. 'Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,' U.S. Commerce Secretary Howard Lutnick responded in a post on X. Stocks hit record highs on Wall Street on Monday morning as sentiment in the markets rose amid optimism about U.S. trade negotiations with key partners, including Canada. U.S. Treasury Secretary Scott Bessent also struck an optimistic tone over the potential for 'a flurry' of trade deals ahead of a July 9 deadline, after which 10% U.S. tariff rates on imports from many countries are set to snap back to Trump's April 2 announced rates of 11% to 50%. But Bessent, speaking on Bloomberg Television, warned that countries may not get extensions from that deadline, even if they are negotiating in good faith as he suggested previously. Any extensions would be up to Trump himself, Bessent said. Leavitt said Trump was meeting his trade team this week to set tariff rates for those countries that weren't negotiating. 'He is going to set the rates for many of these countries if they don't come to the table to negotiate in good faith, and he is meeting with his trade team this week to do that,' she said. Trump abruptly called off trade talks with Canada on Friday over Ottawa's digital services tax, saying it was a 'blatant attack.' He reiterated this 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. 'We have countries that are negotiating in good faith, but they should be aware that if we can't get across the line because they are being recalcitrant, then we could spring back to the April 2 levels,' Bessent said. 'I hope that won't have to happen.' Trade U-turn Trump and Carney met at the G7 summit, with the Canadian prime minister saying 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 US$20 million in a calendar year, and payments were to be retroactive to 2022. It would have impacted giant U.S. technology firms, including Meta, Alphabet's Google and Apple. The tax collection slated for Monday will be halted, a statement from Canada's finance ministry said. Finance Minister Francois-Philippe Champagne will bring forward legislation to rescind the Digital Services Tax Act. Canada is engaged in complex negotiations on a new economic and security partnership with the U.S. Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians. 🔗 — François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) June 30, 2025 Canadian business groups applauded Carney's decision as well as the U.S. Congress' removal of a 'revenge tax' provision from Republican tax legislation, known as 899. 'The decision to eliminate the DST makes sense. This tax would have fallen on Canadian consumers, businesses, and investors in the form of higher costs and hurt our economy at a critical time,' said David Pierce, vice president of Government Relations at the Canadian Chamber of Commerce in a statement. Some observers said Carney's decision ran counter to his campaign promises, however. Carney's Liberal party won an election in April pledging to stand up to Trump. 'It feels like we're standing down really quickly,' said Vass Bednar, managing director of the Canadian Shield Institute for Public Policy, a think tank. Opposition Conservative Party leader Pierre Poilievre said Carney needs to demand concessions from Trump. 'Canadians need certainty that Liberals will put Canada First and defend Canadian sovereignty in these negotiations,' Poilievre said on X. 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. Canada had escaped Trump's broad tariffs imposed in April but still faces other duties, including 50% on steel and aluminum exports to the United States. Reporting by Kanjyik Ghosh in Bengaluru and Promit Mukherjee in Ottawa; additional reporting by Susan Heavey in Washington and Anna Mehler Paperny in Toronto; Writing by Caroline Stauffer; editing by Christopher Cushing, Michael Perry, Paul Simao, Mark Heinrich and Marguerita Choy, Reuters
BBC News
2 days ago
- Business
- BBC News
White House says Canada's Carney 'caved' to Trump on tech tax
The White House said Canadian Prime Minister Mark Carney "caved" to pressure from President Donald Trump in rescinding a tax on big US technology firms. White House Press Secretary Karoline Leavitt told reporters on Monday Canada had made a mistake in trying to levy the tax, and that Carney called Trump on Sunday evening to say he would drop it. Since Trump returned to office, the two countries have been fighting over trade. In response to the tax, which he called a "blatant attack", Trump on Friday called off trade deal negotiations and threatened to raise then said it would halt collection of payments, which were due on Monday, and introduce legislation to scrap the tax. "President Trump knows how to negotiate, and he knows he is governing the best country and the best economy in this world," Leavitt said in response to a question from a reporter. "Every country on the planet needs to have a good relationship with the US," she said, and called removal of the tax a "big victory for our tech companies and our workers here at home". Canada's digital services tax (DST) would have meant US tech giants including Amazon, Meta, Google and Apple faced a 3% charge on Canadian revenue above $20m (£15m).On Sunday, Canada's finance minister, François-Philippe Champagne, issued a statement saying the tax would be rescinded."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," he said."Canada's preference has always been a multilateral agreement related to digital services taxation," the statement Poilievre, the leader of Canada's opposition Conservative Party, criticised scrapping the tax at the "11th hour". In a post on X, he said the prime minister had "put his elbows down" - in reference to the "elbows up" phrase used by Carney and his Liberal Party when campaigning in this April's election to signify they were prepared to defend Canadian interests against the US. Poilievre urged Carney to "insist that the US immediately rescind softwood lumber tariffs" in exchange, adding that "we need to make gains for our workers in these talks". Many countries, including the UK, are changing how they tax large multinational technology firms, which have millions of customers and advertisers around the world, but high corporation tax bills due to the way their businesses are was estimated that Canada's tax would cost the tech giants more than C$2bn ($1.5bn; £1.06bn) in its first year as the tax was being applied retroactively to January year's federal budget estimated the tax would bring in C$5.9bn in total over the next five years.
BBC News
3 days ago
- Business
- BBC News
Canada drops digital services tax to help restart US trade talks
Canada has scrapped a tax on big US technology firms, just hours before it was due to come into force, to allow trade talks between the two countries to Friday, US President Donald Trump called off negotiations over a trade deal, describing the tax as a "blatant attack", and threatened higher tariffs on imports from response, Canada has said it is removing the tax, which should have come into effect on digital services tax (DST) would have meant US tech giants including Amazon, Meta, Google and Apple, facing a 3% charge on Canadian revenue above $20m. Canada's finance minister François-Philippe Champagne issued a statement saying the tax would be rescinded."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," it said."Canada's preference has always been a multilateral agreement related to digital services taxation," the statement countries, including the UK, are changing how they tax large multinational technology firms, which have millions of customers and advertisers around the world, but high corporation tax bills due to the way their businesses are was estimated that Canada's tax would cost the tech giants more than $2bn a year in who has forged a close relationship with tech company owners in his second term in office, has pushed back against such described Canada's policy as "egregious" adding "economically we have such power over Canada".Three quarters of Canada's goods exports go to the US, worth more than $400bn a year, while Canada takes just 17% of US climbdown comes after a rollercoaster few months for US-Canada after taking office Trump threatened to impose sweeping new tariffs and even to annex the US's northern neighbour. The antagonism helped propel Canada's Liberal Party, led by former central banker, Mark Carney, back into power. Since then there appeared to be a rapprochement, with Canada and the US saying they aimed to agree new trade terms by 21 July.
Yahoo
3 days ago
- Business
- Yahoo
Canada rescinds digital services tax to advance stalled US trade talks
OTTAWA (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. 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, Meta, Alphabet's Google and Apple, 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Trump says he is ending Canada trade talks amid tech tax dispute
Donald Trump has announced he is ending trade talks with Canada, one of its largest trading partners, accusing it of imposing unfair taxes on US technology companies in a 'direct and blatant attack on our country'. The news came hours after the US had announced a breakthrough in talks with China over rare-earth shipments into America, and announcements from top officials that the US would continue trade negotiations beyond a 9 July deadline set by Trump. Signs of a cooling in the trade war sent US stock markets to new highs. The US has been negotiating a trade deal with Canada, one of its top two global trading partners, for months. Mark Carney, Canada's prime minister, met Trump at the G7 summit of world leaders in Alberta earlier this month. Carney announced that Trump had agreed to 'pursue negotiations toward a deal within the coming 30 days'. But talks appear to have foundered over Canada's decision to impose a digital services tax on US technology companies. First payments on the tax are due on Monday and will cost US tech companies, including Alphabet, Amazon and Meta, an estimated $3bn. Trump wrote on Truth Social: '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. '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. 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!'
