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Wall Street Journal
7 hours ago
- Business
- Wall Street Journal
U.S. Likely to Probe Canada's Looming Digital Tax
The U.S. will likely open a tariff investigation against Canada to respond to its planned imposition of a digital services tax on tech firms, Treasury Secretary Scott Bessent said. Such a move would kick off a slower-moving, but potentially more legally durable, tariff action than the emergency law that underpins the administration's 'Liberation Day' tariffs. Bessent told CNBC that his inclination is that the U.S. Trade Representative's office will open a tariff probe under Section 301 of the Trade Act of 1974—the same authority President Trump used in his first term to impose tariffs on China. That action, Bessent said, is 'more durable, and could last longer' than tariffs based on the International Emergency Economic Powers Act, which Trump used for his so-called reciprocal tariffs that have since been ruled illegal by the Court of International Trade. The administration has appealed that decision.
Telegraph
7 hours ago
- Business
- Telegraph
Furious Trump walks away from Canada trade talks
Donald Trump has walked away from trade talks with Canada in response to a digital services tax he described as a 'blatant attack on our country'. The president said he had immediately ended discussions taking place to address the series of tariffs he placed on the country earlier this year. In a post on Truth Social, Mr Trump said his administration had been informed that Canada was planning to proceed with a three per cent tax on technology companies such as Meta, Uber, Amazon and Google, on revenue earned from Canadian customers. Because the tax is retroactive, the American companies could face a bill of as much as $2bn by the end of the month. On Thursday, Scott Bessent, the Treasury Secretary, said the Group of Seven nations would put a pause on the taxes for US tech companies. In exchange, he said Republicans in Congress were planning to halt a so-called revenge tax on foreign investors. 'Based on this egregious tax, we are hereby terminating ALL discussions on trade with Canada, effective immediately,' Mr Trump wrote. '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.' Canada is the US's second biggest trading partner after Mexico, and bought around $350bn (£255) worth of American goods last year, according to official data. In exchange, it exported $412bn (£300) of goods. Canadians were stunned when Mr Trump announced major tariffs on its northern neighbour, as well as Mexico. Canada hit back at the 25 per cent levy on steel and aluminium, with a similar tariff on a range of US items. Mark Carney has said the trading relationship between the two countries had been changed forever. Anger over the tariffs was one of the reasons Mr Carney's beleaguered Liberal Party was re-elected, despite being poised to lose to the Conservative Party in a general election in May. Mr Carney who previously led both the Bank of England and the Bank of Canada, took a hard line against the US president as he continued to make '51st state' jibes. There was no immediate response from Mr Carney's office on Friday's development. It comes as Mr Trump's government is set to reimpose a number of high tariffs that he announced in April on almost all of America's trading partners. Of those nations, only two countries, Britain and China, have agreements with the US to even a framework of a trade deal.
Wall Street Journal
8 hours ago
- Business
- Wall Street Journal
TNB Tech Minute: Trump Halts Canada Trade Talks Over New Tax on American Tech Companies - Tech News Briefing
Full Transcript This transcript was prepared by a transcription service. This version may not be in its final form and may be updated. Victoria Craig: Here's your TNB Tech Minute for Friday, June 27th. I'm Victoria Craig for the Wall Street Journal. President Trump today terminated all trade talks with Canada, partly over a new digital services tax on American tech companies. The president said the US's northern neighbor has been, quote, a very difficult country to trade with. Trade negotiations have been taking place between the two sides for months. Meanwhile, the Trump administration is also considering executive orders aimed at increasing power generation to meet AI demand, according to people familiar with the matter. That could include giving federal land to tech companies to build data centers and expediting grid connections and permitting for advanced power generation projects. Elsewhere, in a 6-3 decision, the Supreme Court upheld a Texas law requiring certain websites that host sexual content to verify viewers' ages. The Texas law requires websites that contain more than one-third sexual material harmful to minors to use what it calls reasonable age verification methods to determine those visitors are at least 18 years old. Violations are punished with a monetary fine. Search engines and major social media networks are exempt from the state's law. And finally, New York's governor Kathy Hochul signed into law legislation requiring local governments in the state to report cyber attacks on their networks within 72 hours. It also compels organizations to report any ransom payments made to hackers within 24 hours, and mandates security awareness training for New York government employees. The state's new law is in line with pending federal regulations being hammered out by the US Cybersecurity and Infrastructure Security Agency. For a deeper dive into what's happening in tech, check out Monday's Tech News Briefing podcast.
CBC
8 hours ago
- Business
- CBC
What to know about Canada's digital services tax — and the money at stake
Social Sharing In the last few weeks and months, U.S. President Donald Trump has given a number of rationales for escalating the trade dispute between Canada and the United States. On Friday, he zeroed in on Canada's digital services tax — a new levy expected to cost the largest American tech giants billions of dollars in the coming years after it kicks in on Monday. International trade lawyer William Pellerin was only shocked the U.S. president didn't bring it up sooner. "It's actually quite surprising that it took them this long to make a big stink about this issue," Pellerin, who works for McMillan LLP, told CBC News Network on Friday. "If the U.S. was going to take a run at this and really has had a beef with Canada on this issue for a really long time, they really had no choice but to escalate that issue at the last minute now." Here's what you need to know about the tax, which has been a thorn in the side of the Canada-U.S. relationship for years. What is the digital services tax? Canada's digital services tax (DST) affects mega companies that offer digital services — like online advertising or shopping — and earn more than $20 million in revenue from Canadian sources. Giant companies like Amazon, Apple, Airbnb, Google, Meta and Uber will be taxed three per cent on the money they make from Canadian users and customers. The levy has been in place since last year, but the first payments are due starting Monday. It's retroactive to 2022, so companies will end up with a $2-billion US bill due by the end of July. Why is Canada creating the tax? Revenue is one big benefit. The Parliamentary Budget Office estimated last year that the tax would bring in more than $7 billion over five years. The Liberals first promised the tax during the federal election in 2019, but it was delayed for years because a number of other nations wanted to work together on one, overarching digital taxation plan that could be applied in multiple countries. As the delays dragged on, Canada went ahead with its own tax plan. What is the U.S. stance on the tax? The United States has been hostile to the tax from the beginning because it largely affects American tech giants. Officials have argued the tax discriminates against American companies and Congress, notoriously divided between Democrats and Republicans, found a moment of common ground in criticizing Canada's plan. The Computer & Communications Industry Association has estimated U.S. companies could pay as much as $1 billion a year in tax if the measure remains on the books. A number of industry experts — from lawyers to cross-border groups and commerce associations — have warned for years that the tax would strain the relationship between Canada and the U.S., with one going so far as to predict in 2023 that the tax alone would be to blame for a trade war. WATCH | Trump says he's ending talks with Canada over DST: Trump says he's ending 'all discussions on trade with Canada' 2 hours ago Duration 2:28 Why won't Canada delay the tax until the trade war cools down? Canadian and U.S. business groups, organizations representing U.S. tech giants and American lawmakers all signed letters in recent weeks calling for the tax to be eliminated or paused. But Finance Minister François-Philippe Champagne said the legislation was passed by Parliament, and Canada would be "going ahead" with the tax. Pellerin, the international trade lawyer, said he suspects the federal government will avoid changing its plan because it's taken a strategy of avoiding knee-jerk reactions to Trump's negotiation tactics. "The Trump administration is not known for negotiating quietly in the back rooms or in the hallways of power … so I don't think this is unexpected," he said. How could the U.S. retaliate? Trump says he's pulling back from the bilateral trade discussions because Canada plans to move ahead with its DST on Monday, a move he described online as "a direct and blatant attack on our country." The move put the 30-day deadline to reach an agreement in the trade dispute into doubt. The Biden administration also opposed the tax, but tried to resolve the issue differently: It asked Canada for dispute settlement consultations under the Canada-United States-Mexico-Agreement (CUSMA) last August. That consultation period ended in November without the Biden administration taking the case to the next step, but there is no time limit on when the U.S. could pick that plan back up — so the CUSMA route is still available to the current administration if Trump wanted to move away from his current tactic. Do other countries have similar taxes?
Bloomberg
8 hours ago
- Business
- Bloomberg
Trump Ends Trade Talks With Canada
President Donald Trump said he was ending all trade discussions with Canada after claiming the country moved to implement a digital services tax, and threatened to impose a fresh tariff rate within the next week. Tyler Kendall reports from the White House. (Source: Bloomberg)
