Talks with US back on track after Canada drops tech tax plan
U.S. President Donald Trump had previously halted discussions, criticizing Canada's intention to implement the tax as "a direct and blatant attack on our country." In response to the evolving trade situation, the Canadian government stated that it would withdraw the Digital Services Tax "in anticipation" of reaching a trade agreement. This tax was set to take effect on June 30.
Following a phone call between Carney and Trump, Carney's office confirmed that both leaders agreed to resume negotiations. In a statement, Carney emphasized that "today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set forth during this month's G7 Leaders' Summit in Kananaskis."
Carney had previously visited Trump at the White House in May, maintaining a polite but assertive demeanor. When Trump attended the G7 summit in Alberta, Carney noted that both countries had established a 30-day deadline for trade discussions.
In a social media post, Trump indicated that Canada had reaffirmed its plan to move forward with the digital services tax, which would affect both Canadian and international companies interacting with users in Canada. This tax would impose a three percent charge on revenue from Canadian users on companies such as Amazon, Google, Meta, Uber, and Airbnb. It would apply retroactively, resulting in a potential US$2 billion bill for U.S. firms by the month's end.
Daniel Béland, a political science professor at McGill University in Montreal, described Carney's decision to retract the tax as a "clear victory" for Trump. He suggested that while this move could have been necessary for the trade negotiations, Carney's actions were a direct concession to appease Trump, which ultimately benefited both the White House and major tech companies.
Discussions between Canada and the U.S. have also included the potential easing of substantial tariffs imposed by Trump. He has enacted 50 percent tariffs on steel and aluminum, as well as 25 percent tariffs on automobiles, alongside a 10 percent tax on imports from numerous countries, with the possibility of increasing rates on July 9 after a 90-day negotiating period.
Canada and Mexico are also facing tariffs of up to 25 percent initiated by Trump under the pretext of combating fentanyl smuggling. However, some products remain protected under the 2020 U.S.-Mexico-Canada Agreement established during Trump's first term.
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Global News
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Vancouver Sun
an hour ago
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Edmonton Journal
an hour ago
- Edmonton Journal
Canada's homebuilding industry feeling strain of U.S. tariffs on costs, supply chain
As a tariff storm blew in from south of the border earlier this year, many industries in Canada, including the home building sector, feared the unknown ahead of them. Article content With stakeholders already keenly aware of the need to rapidly scale up housing supply and improve Canada's housing affordability gap, blanket tariffs and more targeted material-specific levies meant additional unwelcome obstacles to overcome. Article content Article content That included a potential need to slow down the pace of construction as supply chains shifted and key construction parts became more expensive. Article content 'It's difficult to pinpoint what exactly is the cost impact, but we certainly can say that there is an impact in terms of business confidence and … having materials when they need them in a timely manner.' Article content About six months after U.S. President Donald Trump's return to the White House, many in the home construction sector say unpredictability persists around the cost and timing of obtaining the materials they need. Article content For Geranium, that's meant having to pivot on the fly when it comes to the supply chains it's long relied on. Article content Shindruk said the firm is now increasingly sourcing materials made in Canada, such as brick and stone, and doubling down on products typically imported from other countries besides the U.S. That includes steel, which it sources from countries including South Korea, Portugal and China — allowing it to avoid surtaxes on American steel in response to Trump's tariffs. Article content Article content But she said some materials simply can't be replicated in domestic or other international markets. For instance, a component in the layered glass windows used by Geranium continues to be sourced from the U.S. due to patent issues. The company has essentially decided to eat the extra costs. Article content Article content 'It's not like switching on a switch and all of a sudden those materials that used to be sourced from the U.S, which are significant, can now be produced in Canada,' she said. Article content 'Where that's not realistic, then items are continuing to be sourced from the U.S. and (we're) paying the tariff.' Article content Among products hit hardest by the trade war, Canadian Home Builders' Association CEO Kevin Lee highlighted appliances, interior doors and carpeting. Article content Article content In some cases, he said builders have looked for substitutions to their typical input materials.
