Canada backs down, EU holds firm as U.S. tariff deadline looms

Canada Standard

5 hours ago

Shipping containers are stacked on container ships at the Port of Los Angeles in Los Angeles, California, U.S., June 25, 2025. /VCG
The United States has restarted trade negotiations with Canada following Ottawa's decision to scrap its digital services tax, a move welcomed by the White House.
But across the Atlantic, the European Union is taking a starkly different stance, refusing to put its digital legislation on the table in ongoing trade talks with Washington.
The development on Monday came as a July 9 deadline approaches for the U.S. to reimpose tariffs of up to 50 percent on several trading partners unless trade deals are reached.
Canada scraps digital tax, talks with U.S. restart
The trade talks between the United States and Canada will resume immediately following Canada's cancellation of the digital service tax (DST), said White House National Economic Council Director Kevin Hassett on Monday.
Hassett said U.S. President Donald Trump asked Canadian Prime Minister Mark Carney to "take the DST tax off" at the G7 meeting in Canada earlier this month.
"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," Hassett said in an interview with Fox News.
Canada's Minister of Finance and National Revenue Francois-Philippe Champagne announced Sunday that Canada will rescind its DST as it prepares for a broader trade agreement with the United States.
The tax, which was designed to take effect on Monday, would impose a 3-percent levy on the revenue of U.S. multinational companies like Amazon, Google and Meta earned from Canadian users.
Trump announced Friday that the United States would terminate all trade talks with Canada due to Canada's digital services tax on U.S. tech companies.
EU digital legislation 'not on table'
The digital legislation is not on the table in the trade negotiations between the European Union and the United States, European Commission spokesperson Thomas Regnier told a briefing Monday.
Regnier emphasized that European Commission President Ursula von der Leyen has made it clear that EU legislation is not up for negotiation, "and this also includes, of course, our digital legislation," he said.
"We're not going to adjust the implementation of our legislation based on the actions of third countries. If we started to do that, then we would have to do it with numerous third countries," Regnier added. Nevertheless, the spokesperson said that the Commission remains committed to reaching a trade deal with the United States by July 9.
The United States has repeatedly criticized the EU's digital regulations, including the Digital Markets Act (DMA) and the Digital Services Act (DSA), as unfair and has urged the EU to ease oversight of American tech giants.
In February, the White House warned in a memo that it would consider retaliatory measures if EU regulators targeted American tech firms under the DMA or the DSA.
Just two months later, in April, the European Commission found that U.S. companies Apple and Meta violated the DMA and issued significant fines against both firms.
European Commissioner for Trade and Economic Security Maros Sefcovic announced Monday that he will travel to Washington on July 1 to continue efforts toward a U.S.-EU trade deal.
Bloomberg reported Monday that the EU is willing to accept a trade arrangement with the U.S. that includes a 10 percent universal tariff on many of the bloc's exports but wants the United States to commit to lower rates on key sectors such as pharmaceuticals, alcohol, semiconductors and commercial aircraft.
The EU is also pushing the United States for quotas and exemptions to effectively lower Washington's 25 percent tariff on automobiles and car parts as well as its 50 percent tariff on steel and aluminum, according to Bloomberg.
(With input from Xinhua)
Source: CGTN