WASHINGTON, June 28 (Reuters) - U.S. President Donald Trump announced a complete suspension of trade negotiations with Canada on Wednesday, following Canada's decision to impose a digital tax on American technology companies.
Trump made the announcement via his social media platform, Truth Social, calling the digital services tax "a direct and blatant attack on our country." He further declared, "Because of this outrageous tax, we are hereby immediately terminating all trade talks with Canada."
The President indicated that within the next week, Canada would be informed of the new tariffs they would incur when conducting business with the United States. This move signals a potential escalation in trade tensions unless Canada reassesses its digital tax policy.
Canada's digital services tax, effective this year, levies a 3% tax on revenues from digital platforms, including online marketplaces, targeted advertising, and social media. The tax applies to companies with global revenues exceeding 750 million euros and digital services revenues in Canada surpassing 20 million Canadian dollars.
The measure was introduced to address concerns that multinational tech giants were reaping substantial profits without paying fair taxes in the countries where they operate. However, the Trump administration perceives this as a discriminatory action targeting American firms such as Google, Apple, Amazon, and Meta. In response, the U.S. has vowed to counteract with tariffs and other measures against nations imposing such taxes.
As the situation unfolds, the possibility of a trade conflict looms, potentially affecting the economic ties between the U.S. and Canada, two of the world's largest trading partners.
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