Latest news with #trade negotiations
The Guardian
a day ago
- Business
- The Guardian
White House says Canadian PM ‘caved' to Trump demand to scrap tech tax
The United States has said that Canada's prime minister Mark Carney 'caved' to demands from the White House after his government abruptly scrapped their digital services tax on US technology companies, which was set to go into effect on Monday. 'It's very simple. Prime minister Carney and Canada caved to president [Donald] Trump and the United States of America,' press secretary Karoline Leavitt said in a daily briefing. 'The president made his position quite clear to the prime minister and the prime minister called the president last night to let the president know that he would be dropping that tax.' Carney told reporters on Monday his decision to backtrack on a controversial tax was meant to revive trade negotiations with the United States after Trump halted talks on Friday, alleging a Canadian effort to coax payments from American tech heavyweights operating in Canada was a 'direct and blatant attack on our country'. On Monday, White House economic adviser Kevin Hassett told Fox News that Canada's decision 'absolutely' meant both sides would resume talks. In an announcement late on Sunday, Carney said key talks with the administration would resume now Canada had repealed the levy, which applied to US tech companies such as Meta, Amazon, Google parent Alphabet, Uber and Airbnb. Canada's finance ministry said Carney and Trump would resume trade negotiations in order to agree a deal by 21 July. The tax was first announced in 2020 and was designed to remedy the fact that many large American technology companies operating in Canada did not pay tax on revenues generated from Canadians. The tax has long been an irritant for Donald Trump, and he used that frustration Friday to 'terminat[e] all discussions on trade' with Canada, calling the digital services tax 'a direct and blatant attack on our country'. Canada's decision to cancel the tax comes as the US and Canada are locked in negotiations over a trade and security deal. Carney wants tariffs imposed by the Trump administration removed as part of an agreement. Currently, Canada faces tariffs of 50% on steel and aluminum exported to its largest trading partner and a 25% on tax on cars, as well as blanket tariffs on all other goods exported outside the US-Mexico-Canada trade agreement. Canada was set to collect a 3% levy on digital services by major tech companies. The first payments were due on Monday and large American companies were expected to pay more than US$2bn to Canada's federal government – a fee retroactive to 2022. Over a five-year period, the tax was expected to raise more than US$7bn. Hassett said Trump had raised the tax issue with Carney at the G7 summit in Kananaskis, Alberta earlier this month. 'One of the things that the president asked for was that they would take the … tax off. 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.' US commerce secretary Howard Lutnick thanked the Canadian government for dropping the tax as others in the administration rushed to credit Trump for the policy shift. 'Thank you Canada for removing your digital services tax, which was intended to stifle American innovation and would have been a deal-breaker for any trade deal with America,' Lutnick posted on social media. The walkback suggests the 'Canadian government misreading the tech sector has become a hallmark of its policy', according to Michael Geist, a law professor at University of Ottawa and the Canada Research Chair in internet and e-commerce law. 'It is hard to overstate how badly the government managed the [digital services tax] issue over the past five years,' he wrote in a blogpost, adding the move to pursue the tax 'alienated allies' and 'solidified opposition, and continually downplayed the concerns of successive US presidents and members of Congress from both sides of the aisle'. Geist said moving forward with the tax left Canada in a 'no-win situation' and suggested the government had 'overplayed its hand'. 'Unfortunately, the government has too often viewed tech primarily as a source of revenue for policy projects – the proverbial 'make web giants pay' – while overestimating the attractiveness of the Canadian market and underestimating the risks of costly regulation,' he wrote. 'Canada desperately needs a tech regulation reset. Perhaps the embarrassment of walking away from $7bn will provide the wake-up call.' Business groups praised the move. 'This tax would have fallen on Canadian consumers, businesses and investors in the form of higher costs and hurt our economy at a critical time,' David Pierce, vice-president of government relations at the Canadian chamber of commerce said in a statement, adding the end of the tax 'moves us one step closer to a renewed, reliable trade deal' with the United States.
Yahoo
a day ago
- Business
- Yahoo
White House says Canadian PM ‘caved' to Trump demand to scrap tech tax
The United States has said that Canada's prime minister Mark Carney 'caved' to demands from the White House after his government abruptly scrapped their digital services tax on US technology companies, which was set to go into effect on Monday. 'It's very simple. Prime minister Carney and Canada caved to president [Donald] Trump and the United States of America,' press secretary Karoline Leavitt said in a daily briefing. 'The president made his position quite clear to the prime minister and the prime minister called the president last night to let the president know that he would be dropping that tax.' Carney told reporters on Monday his decision to backtrack on a controversial tax was meant to revive trade negotiations with the United States after Trump halted talks on Friday, alleging a Canadian effort to coax payments from American tech heavyweights operating in Canada was a 'direct and blatant attack on our country'. On Monday, White House economic adviser Kevin Hassett told Fox News that Canada's decision 'absolutely' meant both sides would resume talks. In an announcement late on Sunday, Carney said key talks with the administration would resume now Canada had repealed the levy, which applied to US tech companies such as Meta, Amazon, Google parent Alphabet, Uber and Airbnb. Canada's finance ministry said Carney and Trump would resume trade negotiations in order to agree a deal by 21 July. Related: Trump says he is ending Canada trade talks amid tech tax dispute The tax was first announced in 2020 and was designed to remedy the fact that many large American technology companies operating in Canada did not pay tax on revenues generated from Canadians. The tax has long been an irritant for Donald Trump, and he used that frustration Friday to 'terminat[e] all discussions on trade' with Canada, calling the digital services tax 'a direct and blatant attack on our country'. Canada's decision to cancel the tax comes as the US and Canada are locked in negotiations over a trade and security deal. Carney wants tariffs imposed by the Trump administration removed as part of an agreement. Currently, Canada faces tariffs of 50% on steel and aluminum exported to its largest trading partner and a 25% on tax on cars, as well as blanket tariffs on all other goods exported outside the US-Mexico-Canada trade agreement. Canada was set to collect a 3% levy on digital services by major tech companies. The first payments were due on Monday and large American companies were expected to pay more than US$2bn to Canada's federal government – a fee retroactive to 2022. Over a five-year period, the tax was expected to raise more than US$7bn. Hassett said Trump had raised the tax issue with Carney at the G7 summit in Kananaskis, Alberta earlier this month. 'One of the things that the president asked for was that they would take the … tax off. 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.' US commerce secretary Howard Lutnick thanked the Canadian government for dropping the tax as others in the administration rushed to credit Trump for the policy shift. 'Thank you Canada for removing your digital services tax, which was intended to stifle American innovation and would have been a deal-breaker for any trade deal with America,' Lutnick posted on social media. The walkback suggests the 'Canadian government misreading the tech sector has become a hallmark of its policy', according to Michael Geist, a law professor at University of Ottawa and the Canada Research Chair in internet and e-commerce law. 'It is hard to overstate how badly the government managed the [digital services tax] issue over the past five years,' he wrote in a blogpost, adding the move to pursue the tax 'alienated allies' and 'solidified opposition, and continually downplayed the concerns of successive US presidents and members of Congress from both sides of the aisle'. Geist said moving forward with the tax left Canada in a 'no-win situation' and suggested the government had 'overplayed its hand'. 'Unfortunately, the government has too often viewed tech primarily as a source of revenue for policy projects – the proverbial 'make web giants pay' – while overestimating the attractiveness of the Canadian market and underestimating the risks of costly regulation,' he wrote. 'Canada desperately needs a tech regulation reset. Perhaps the embarrassment of walking away from $7bn will provide the wake-up call.' Business groups praised the move. 'This tax would have fallen on Canadian consumers, businesses and investors in the form of higher costs and hurt our economy at a critical time,' David Pierce, vice-president of government relations at the Canadian chamber of commerce said in a statement, adding the end of the tax 'moves us one step closer to a renewed, reliable trade deal' with the United States. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Digital Services Tax axed to 'advance' trade talks with U.S: Finance Dep't
The federal government's Digital Services Tax has been rescinded to 'advance broader trade negotiations' with the United States, the Finance Department announced quietly late Sunday night. In a statement on its website and posted to social media, the Finance Department said the decision was made 'in anticipation of a mutually beneficial comprehensive trade arrangement' with the hope that the two countries can come to a deal by July 21. There was no immediate reply to an email from the Toronto Sun asking if Prime Minister Mark Carney or Finance Minister Francois-Philippe Champagne planned to address the media Monday on the development. 'In our negotiations on a new economic and security relationship between Canada and the United States, Canada's new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,' Carney said in the statement. 'Today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month's G7 Leaders' Summit in Kananaskis.' The DST, the government said, was announced in 2020 to address large technology companies operating in Canada that 'may not otherwise pay tax on revenues generated from Canadians.' However, it was a source of irritation south of the border with U.S. President Donald Trump calling off trade and tariff talks with Canada Friday due to what he called a 'direct and blatant attack' on the U.S. Carney Liberals urged to ditch DST as Trump terminates trade talks with Canada LILLEY: Carney's team putting up roadblocks to trade deal with U.S. The statement said the anticipated Monday collection of the DST will be halted with Finance Minister Francois-Philippe Champagne expected to soon bring forward legislation to rescind the Digital Services Tax Act. 'Canada's new government is focused on building the strongest economy in the G7 and standing up for Canadian workers and businesses,' Champagne said. 'Rescinding the Digital Services Tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.'
Reuters
12-05-2025
- Business
- Reuters
Japan's Ishiba signals increasing corn imports as part of US trade talks
TOKYO, May 12 (Reuters) - Japanese Prime Minister Shigeru Ishiba on Monday signalled that increasing corn imports from the U.S. would be among options in trade negotiations with Washington. Speaking in parliament, Ishiba repeated that Japan won't sacrifice the domestic agriculture industry for the sake of winning U.S. tariff concessions for automobiles. "Still, Japan can use corn not for consumption but for use as ethanol fuel. Usage as biomass would be in Japan's national interest," Ishiba said, adding that Japanese soil was not necessarily suited for corn production anyway. "We hope to deepen discussion on whether to use corn for consumption or energy," Ishiba said without elaborating. The U.S. exported $2.8 billion worth of corn to Japan in 2024, to counter an 80% drop in exports to China. Japan has made little headway in trade talks with the U.S. as it seeks exemptions from U.S. tariffs, including on its mainstay automobiles. Japan's top trade negotiator, Ryosei Akazawa, made his second visit to Washington earlier this month with working-level consultations between the two countries now under way. On April 2, U.S. President Donald Trump imposed a 10% tariff on all countries except Canada, Mexico and China, along with higher tariff rates for many big trading partners, including Japan, which faces a 24% tariff rate starting in July unless it can negotiate a deal with the U.S. The tariffs, including a 25% tariff on imported cars, are already weighing heavily on the Japanese economy.
Yahoo
12-05-2025
- Business
- Yahoo
Japan's Ishiba signals increasing corn imports as part of US trade talks
TOKYO (Reuters) - Japanese Prime Minister Shigeru Ishiba on Monday signalled that increasing corn imports from the U.S. would be among options in trade negotiations with Washington. Speaking in parliament, Ishiba repeated that Japan won't sacrifice the domestic agriculture industry for the sake of winning U.S. tariff concessions for automobiles. "Still, Japan can use corn not for consumption but for use as ethanol fuel. Usage as biomass would be in Japan's national interest," Ishiba said, adding that Japanese soil was not necessarily suited for corn production anyway. "We hope to deepen discussion on whether to use corn for consumption or energy," Ishiba said without elaborating. The U.S. exported $2.8 billion worth of corn to Japan in 2024, to counter an 80% drop in exports to China. Japan has made little headway in trade talks with the U.S. as it seeks exemptions from U.S. tariffs, including on its mainstay automobiles. Japan's top trade negotiator, Ryosei Akazawa, made his second visit to Washington earlier this month with working-level consultations between the two countries now under way. On April 2, U.S. President Donald Trump imposed a 10% tariff on all countries except Canada, Mexico and China, along with higher tariff rates for many big trading partners, including Japan, which faces a 24% tariff rate starting in July unless it can negotiate a deal with the U.S. The tariffs, including a 25% tariff on imported cars, are already weighing heavily on the Japanese economy. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
