Donald Trump said that he was ending trade talks with Canada over its digital services tax, which will impact major tech firms like Google, Meta and Amazon.
Trump also said that he would hit Canada with a new tariff in the coming week.
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!”
The digital services tax is a 3% yax on revenue earned from online marketplace services, online advertising services, social media services and certain sales of user data. The tax is due to take effect on Monday.
The Computer & Communications Industry Association, representing major tech firms, said that the tax will require companies to pay up to $3 billion in payments, including retroactive charges going back to 2022. They have called for the U.S. Trade Representative to open an investigation.
Matt Schruers, the president and CEO of CCIA, said in a statement, “Canada’s decision to begin collecting payment under this unfair and discriminatory tax marks an unfortunate escalation in the targeted efforts of foreign governments to extract revenue from leading U.S. firms – while exempting their own domestic competitors. This undermines not only a key U.S. export sector, but also bilateral trade ties between two critical partners.”
The Motion Picture Association-Canada and major streaming companies like Netflix and Amazon have been fighting another tax, 5% on their Canadian revenue. The tax was from the Canadian Radio-television and Telecommunications Commission’s implementation of the Online Streaming Act to raise revenue for Canadian content. A Federal Court of Appeal has put a pause on the tax until an appeal can be heard.
