In a tweet on Truth Social on Friday, President Donald Trump declared that he had ended trade negotiations with Canada and would shortly announce a new tariff rate for that nation. After Canada revealed a digital service tax, which Trump described as “a direct and blatant attack on our Country,” the decision was made to abandon the months-long discussions.
With immediate effect, we are terminating all trade discussions with Canada due to this unjust tax. Within the next seven days, we will inform Canada of the tariff they must pay to conduct business with the United States of America,” he stated.
Unlike taxes on tangible goods, digital services taxes allow nations to impose taxes on internet services. Even if an internet firm is not lucrative, countries that impose these taxes can nevertheless collect money from it. According to research released last year by the nonpartisan Congressional Research Service, DSTs disproportionately damage American businesses, particularly Big Tech companies like Meta, Apple, Google, Amazon, and Microsoft.
Throughout trade talks with other nations, Trump has specifically criticised DSTs, which he frequently refers to as “non-tariff trade barriers.” On Monday, Canada will implement a new DST that will be retroactive to 2022.
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