Trump halts trade talks with Canada over digital tax, threatens new tariffs
US President Donald Trump announced Friday that the United States is immediately ending all trade talks with Canada, citing the country's digital services tax as the reason for the abrupt decision.In a post on Truth Social, Trump called the tax "a direct and blatant attack on our country" and accused Canada of mirroring similar measures implemented by the European Union. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,' Trump wrote.advertisementThe president added that his administration would notify Canada within the next seven days of the new tariffs it will face to continue doing business with the United States.
The digital services tax, which took effect in June 2024, imposes a 3% levy on revenues earned by large companies from digital services provided to Canadian users. The measure applies to online advertising, social media platforms, digital marketplaces, and sales involving user data. The first tax payments are scheduled to be collected on Monday.Trump further criticized Canada's overall trade practices, calling it 'a very difficult Country to TRADE with,' and claimed that Canadian tariffs on US dairy products can reach as high as 400 per cent.The move to terminate trade talks comes amid ongoing tensions between the two countries, following a series of tariffs imposed by the Trump administration earlier this year.advertisementCanada responded with retaliatory duties on American goods. Although both sides have expressed a desire to renegotiate their trade framework, progress has stalled.The US-Mexico-Canada Agreement (USMCA), negotiated during Trump's first term, is scheduled for review and possible renegotiation by 2026. However, Trump and Canadian Prime Minister Mark Carney had previously aimed to reach a revised agreement by July 21, 2025.- EndsTune InMust Watch
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NDTV
33 minutes ago
- NDTV
Digital Services Tax: Trump's Latest Beef With Canada
New Delhi: US President Donald Trump is once again going after Canada. He has announced through Truth Social that he is "terminating all discussions on trade" with Canada with immediate effect. The reason for his tirade this time is the Digital Services Tax. The Digital Services Tax was enacted last year, but companies are expected to start paying the tax from June 30. And since it will directly impact the big tech companies and large e-commerce platforms headquartered in the US, President Trump is seeing red. What is the Digital Services Tax The Digital Services Tax requires foreign and domestic large businesses to pay revenue tax that is earned from engaging with online users in Canada. It applies a three per cent tax on revenue earned from some digital services that rely on engagement, data, and content contributions. So, the taxable revenue could be generated through online marketplace services, online advertising services, social media services, and sales of user data. The Digital Services Tax will apply to companies or groups with annual global revenues of €750 million or more and Canadian digital services revenue of more than CAD 20 million. Significantly, the tax is retroactive to January 1, 2022, and companies will start paying the tax on June 30, 2025. Canada's rationale vs US pushback The overarching premise of the Digital Services Tax is that if big companies, that are based abroad, are earning significant revenue from Canadian users, then Canada should be able to tax a portion of that income. The revenue that Canada would make from the Digital Services Tax is expected to be around $875 million per year, said a note from the US Trade Representative last year. Over five years, the Digital Services Tax will increase federal government revenues by CAD 7.2 billion, per the Canadian Parliamentary Budget Office. The Computer and Communications Industry Association (CCIA) in the US claims that companies will end up paying up to $3 billion in taxes to Canada. It is also predicting 3,000 US job losses. What has been US' response in the past The US Trade Representative (USTR) had previously investigated Digital Services Tax in other countries and said that it had found them discriminatory toward US companies. The US had announced plans for retaliatory tariffs against the countries with Digital Services Tax and had said it would use the same yardstick for Canada. In August 2024, USTR Katherine Tai announced that the United States had requested dispute settlement consultations with Canada under the United States-Mexico-Canada Agreement (USMCA or CUSMA) regarding Canada's Digital Services Tax. The USTR had alleged that Canada's tax appeared to be inconsistent with its commitments under the Cross-Border Trade in services and investment chapters of the USMCA, not to treat US businesses less favourably than Canadian businesses. The US said that it had raised the concern with Canada in three official comments about its plan to enact a Digital Services Tax in June 2021, February 2022, and in September 2023. The US Chambers of Commerce has called the Digital Services Tax "discriminatory" and said that it is in contravention of prevailing international tax principles. It adds that doing so would not only discriminate against US companies but also directly contravene Canada's obligations under both the US-Mexico-Canada Agreement (USMCA) and the World Trade Organisation. Hence, President Trump's reaction to the Digital Services Tax as the date of payment closes in is hardly a surprise. Why is Canada not flinching yet on Digital Services Tax Earlier this month, Canadian Finance Minister Francois-Philippe Champagne had said the Digital Services Tax was passed by Parliament, and the government would hence go ahead with the tax. The reason why Canada went ahead and implemented its own Digital Services Tax was that the global effort to establish a broader, multinational digital taxation plan had been woefully delayed. Some argue that the Digital Services Tax is a unilateral measure that would undermine the stability of the agreed multilateral framework. However, with the Trump administration imposing unilateral tariffs - from aluminum and steel to automobiles and energy, against Canada - this argument is unlikely to move Canada. At a time when Canada feels betrayed by its largest trading partner, the United States, and is already reeling under the onslaught of the punishing Trump tariffs, it is beginning to assert its economic leverage. And the Digital Services Tax could perhaps serve as a negotiating tool in the process.
&w=3840&q=100)
Business Standard
38 minutes ago
- Business Standard
World leaders use flattery, patience to handle Trump's erratic diplomacy
If world leaders were teaching a course on how to deal with US President Donald Trump early in his second term, their lesson plan might go like this: Pile on the flattery. Don't chase the policy rabbits he sends running across the world stage. Wait out the threats to see what, specifically, he wants, and when possible, find a way to deliver it. With every Oval Office meeting and summit, the leaders of other countries are settling on tactics and strategy in their pursuit of a working relationship with the emboldened American leader who presides over the world's largest economy and commands its most powerful military. The results were there to see at Nato, where leaders heaped praise on Trump, shortened meetings and removed contentious subjects from the agenda. Given that Trump dominates geopolitics, foreign leaders are learning from each other's experiences dating to Trump's first term, when he reportedly threatened to withdraw the US from the alliance. Among the learnable Trumpisms: He disdains traditional diplomacy. With him, it's "America first," it's superlative and "it's not even close." He goes with his gut, and the world goes along for the ride. They're finding, for example, that the sheer pace of Trump's orders, threats and social posts can send him pinging from the priority of one moment to another. He describes himself as "flexible" in negotiations, such as those in which he threatened big tariffs on Canada, Mexico and China only to back down during talks. And while Trump claimed credit for the ceasefire in the Iran-Israel war, he also has yet to negotiate ending the conflicts in Ukraine and Gaza as promised. Trump's threat this week to levy retaliatory tariffs on Spain, for example, "is a mystery to everyone," Belgian Prime Minister Bart De Wever told reporters Thursday during a summit in Brussels. If the tariffs never happen, he said, "It won't be the first time that things don't turn out as bad as they seem at first glance. Or that he changes his mind. I'm not the kind of leader who jumps every time Mr Trump says something." Trump management 101: Discipline vs daddy diplomacy Two summits this month, an ocean apart the Group of Seven in Canada and Nato in The Netherlands illustrate contrasting approaches to the American president on the brink of his sixth month back in office. Meeting in mid-June in Alberta, Canadian Prime Minister Mark Carney welcomed Trump at a press conference by wishing him a happy birthday and adding a smidgen of flattery: "The G7 is nothing without US leadership and your personal leadership of the United States." But when Trump turned partisan, Carney cut off the event, saying: "We actually have to start the meeting." Trump appeared to nod in agreement. But later, on Monday, June 16, he abruptly departed the summit a day early as the conflict between Israel and Iran intensified. Trump ordered US pilots to drop 30,000-pound bombs early Sunday on two key underground uranium enrichment plants in Iran, and by Wednesday announced on social media "a Complete and Total ceasefire." What followed was a 48-hour whirlwind during which Trump veered from elated to indignant to triumphant as his fragile Israel-Iran ceasefire agreement came together, teetered toward collapse and ultimately coalesced. Trump publicly harangued the Israelis and Iranians with a level of pique and profanity that was notable even for him. Chiding the two countries for attacking each other beyond a deadline, he dropped the f-word. Not finished, he then cast doubt on his support for Nato's mutual defence guarantee. Such was the president's mood as he winged toward a meeting of the trans-Atlantic alliance he had disparaged for years. Nato was ready for Trump with a summit set to please him Nato is essentially American, anyway. The Europeans and Canadians cannot function without American heavy lift, air refuelling, logistics and more. Most of all, they rely on the United States for its range of nuclear weapons for deterrence. The June 25 summit was whittled down to a few hours, and one Trump-driven subject: Raising the amount of money the member nations spent on defence to lighten the load carried by the United States. Emphatically not on the agenda: Russia's ongoing war with Ukraine. Trump did, however, meet with President Volodymyr Zelenskyy, who has climbed his own learning curve on Trump management since Trump berated him in the Oval Office in February. The Ukrainian leader has deployed a conciliatory approach and mirrored Trump's transactional style. The goal, widely reported, was to avoid doing anything that might cause Trump to blow up the event or leave. Trump was invited to stay at the royal palace in The Hague and dine with the royal family. It was expected that most members would endorse the plan to raise their spending targets for their one-for-all defence against Russia. The other Nato ambassadors had told Secretary-General Mark Rutte to deploy his Trump-whispering skills. He sent the president a private, pre-summit text predicting Trump would achieve "BIG" success there, which Trump posted on his own socials for all to see. At the summit, Rutte likened Trump's role quieting the Iran-Israel war to a "daddy" interdicting a schoolyard brawl. "He likes me," Trump explained. Backlash was stiff. Lithuania's former foreign minister called Rutte's approach "the gushings of weakness and meekness.
India Today
38 minutes ago
- India Today
If Trump is genuine...: Iran condemns US President's tone against Supreme Leader
If United States President Donald Trump is serious about striking a nuclear deal with Iran, he must abandon his "disrespectful and unacceptable tone" towards Supreme Leader Ayatollah Ali Khamenei and "stop hurting his millions of heartfelt followers," Iranian Foreign Minister Abbas Araqchi said in a post on X early on Saturday."If President Trump is genuine about wanting a deal, he should put aside the disrespectful and unacceptable tone towards Iran's Supreme Leader, Grand Ayatollah Khamenei, and stop hurting his millions of heartfelt supporters," Araghchi Great and Powerful Iranian People, who showed the world that the Israeli regime had NO CHOICE but to RUN to 'Daddy' to avoid being flattened by our Missiles, do not take kindly to Threats and Insults," the Foreign Minister added. Araghchi sharp rebuke came a day after Trump, in a social media post, claimed that he had spared Ayatollah Ali Khamenei from assassination, accusing Iran's Supreme Leader of showing 'ingratitude'."I knew EXACTLY where he was sheltered, and would not let Israel, or the U.S. Armed Forces, by far the Greatest and Most Powerful in the World, terminate his life," Trump posted."I SAVED HIM FROM A VERY UGLY AND IGNOMINIOUS DEATH, and he does not have to say, 'THANK YOU, PRESIDENT TRUMP!" he also claimed he had recently been considering lifting sanctions on Iran, a key demand of Tehran's no, instead I get hit with a statement of anger, hatred, and disgust, and immediately dropped all work on sanction relief, and more," Trump wrote, asking Iran to resume nuclear Iran has rejected claims that it will restart nuclear talks with the United States, dismissing Trump's statement that negotiations would resume next United States targeted three Iranian nuclear facilities last week, but there is no clear agreement on how much damage was strikes marked America's entry into Israel's ongoing offensive against Iran's nuclear programme during the 12-day conflict that began on June 13.- Ends
