Trump Ends Trade Talks with Canada Over Digital Tax
President Donald Trump announced the immediate termination of trade discussions with Canada due to the country's digital services tax on tech companies. The tax, set at 3 percent, has sparked tensions between the two nations. Canada is moving forward with the tax despite concerns from businesses and the US government. The future of US-Canada trade negotiations remains uncertain.
Canada approved a 3 percent digital tax last year in June, with the first payments due on Monday. President Trump announced an immediate end to trade talks with Canada in response to the tax on technology companies. He called it a direct attack on the US and terminated all trade discussions with Canada. The tax, effective since June 2024, charges 3 percent on digital revenue above $14.6 million from Canadian users. Despite business concerns, Canada is proceeding with the tax collection starting Monday.
Last week, Finance Minister Francois-Philippe Champagne hinted at negotiating the tax in broader US-Canada trade talks, which now face uncertainty. Experts warn that tariffs on Canadian goods harm both countries economically. Canada is a significant trade partner for the US, and tensions could impact both economies negatively.
According to experts, Trump's move is an escalation tactic, and Canada needs to navigate negotiations carefully. The digital tax issue is also part of Trump's negotiations with the EU. Coordination with the EU and other partners will be crucial for Canada's response. The Canadian government aims to continue negotiations in the best interest of its workers and businesses.
According to the source: Al Jazeera.
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