President Donald Trump announced the suspension of trade talks with Canada due to a new digital services tax imposed by the Canadian government.
The Canadian government recently implemented a 3% levy on revenue generated from Canadian users by technology firms. This tax applies to major companies such as Amazon, Google, Meta, Uber, and Airbnb. The tax specifically targets services provided by these companies to Canadian consumers.
Trade discussions between the United States and Canada have been ongoing for several months. Trump’s decision to halt these discussions was announced on Friday.
The President described the Canadian tax as “egregious” and stated it was a direct reason for terminating the trade talks.
The digital services tax, which Canada approved last year, came into effect on June 30. It requires affected technology companies to remit a portion of their revenue generated from Canadian users. The tax applies to digital platforms that earn significant income through user interactions in Canada.
Canada’s digital services tax impacts various areas of the technology sector, including online advertising and digital marketplaces. The tax aims to ensure that companies generating substantial profits from Canadian users contribute fairly to the Canadian economy.
The suspension of trade talks by the U.S. administration follows a series of discussions regarding the impact of the Canadian tax on American companies.