US President Donald Trump immediately stops all commercial conversations with Canada. The reason for this is the new digital service tax of three percent that Canada will lift from Monday on large tech companies such as Meta, Google and Amazon. According to Trump, this is “a direct and open attack on the United States”.
‘Within seven days they know what to pay’
On his own Platform Truth Social, Trump announced on Friday that he is suspending the conversations. “Based on this scandalous tax, we put all conversations with Canada about trade, with immediate effect. We will let Canada know what rate they will pay to do business in the US within a period of seven days,” he wrote.
Trump states that the Canadian government has confirmed by going with the tax, which applies retroactively from 2022. According to the White House, American companies should therefore pay around $ 2 billion in overdue tax.
American business welcomes hard line
In Washington, the US government is now talking about a possible section 301 research into Canada. That is a research instrument that was previously used against countries such as China, and can lead to extra import duties. “Economically, we have a lot of power over Canada. It would be stupid of them to leave that tax,” Trump told reporters in the White House.
The Computer & Communications Industry Association, to which Meta and Google, among others, are affiliated, called Trumps hard line “a legitimate response to a discriminatory tax measure against American digital export”.
Canadian worries about consequences for industry
Canadian Prime Minister Mark Carney reacted cautiously and stated that he wants to continue “the negotiations in the interest of the Canadian population”. Canada hopes for a trading deal to reduce existing American import duties on steel, aluminum and cars. Those taxes have already risen to fifty percent in earlier deals.
Canadian companies are concerned about rising costs due to the new tax and possible retaliation measures from the US. The first tax assessments are already falling this week, which further increases pressure on the bilateral trade relationship.
Background: years of tensions between neighboring countries
The trade relationship between the two North American countries has been tense for some time. Trump suggested earlier that Canada should belong to the US as 51st. In May he met Carney in the White House, and at the beginning of June both were still present at the G7 summit in Alberta. It was agreed there to create clarity about a trade agreement within thirty days. That deadline now seems to fall completely into the water.
Canada is the largest foreign supplier of oil, uranium, steel and aluminum on the US. Around eighty percent of Canadian exports go to America.
Source: https://newsbit.nl/trump-breekt-met-canada-digitaks-is-aanval-op-de-vs/
