The two countries have been working to negotiate a trade agreement that benefits both, but while negotiations were going on, Canada imposed a digital services tax that will impose a three percent tax on the money made by Canadian users to firms like Amazon, Google, Meta, Uber, and Airbnb.
Due at the end of the month, US corporations will be faced with a $2 billion (£1.4 billion) payment because it will be applied retrospectively.
Trump responded to the news by criticising the Canadian government for introducing it on Truth Social yesterday, June 27, calling it a “attack” on America.
“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” the message read.
“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”
“We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period. Thank you for your attention to this matter!”
About an hour later, Carney was questioned about the assertion. The calm prime minister gave a direct response, saying, “We’ll continue to conduct these complex negotiations in the best interests of Canadians.”
With Trump later hitting back again, telling reporters in his Oval Office: “Economically we have such power over Canada. We’d rather not use it.”
“It’s not going to work out well for Canada. They were foolish to do it.”
“It doesn’t matter to me,” he said in response to a question about what Canada could do to resume negotiations, even though he predicted that it would eliminate the levy.
It is a domestic tax issue, but because it targets US internet firms, it has been a source of conflict between Canada and the US for some time, according to Daniel Beland, a political science professor at McGill University in Montreal.
“The Digital Services Tax Act was signed into law a year ago so the advent of this new tax has been known for a long time,” Mr Beland said. “Yet, President Trump waited just before its implementation to create drama over it in the context of ongoing and highly uncertain trade negotiations between the two countries.”
Please SHARE this story with Family and Friends and let us know what you think!
