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In Last-Minute Move, Canada Rescinds Digital Services Tax, Restarts Negotiations (newsweek.com) 83

Posted by EditorDavid from the O-Canada dept.
"Canada and the United States have resumed trade negotiations," reports Newsweek, "after Canadian Prime Minister Mark Carney agreed to rescind the country's digital services tax on U.S. technology companies." The development follows President Donald Trump's announcement on Friday that he was suspending all trade talks with Canada "effective immediately" over the tax policy... Canada's quick reversal signals the high stakes involved in maintaining trade relationships with the United States, particularly given the countries' deeply integrated economies.

Carney's office confirmed on Sunday that both leaders have agreed to restart negotiations after Canada committed to abandoning the 3 percent levy targeting major U.S. tech giants including Amazon, Google, Meta, Uber, and Airbnb. The tax was scheduled to take effect Monday and would have applied retroactively, creating an estimated $2 billion bill for American companies. The conflict escalated rapidly after Canada's Finance Department confirmed Friday that companies would still be required to make their first digital tax payments Monday, despite ongoing negotiations. The tax targeted revenue generated from Canadian users rather than corporate profits, making it particularly burdensome for technology companies operating internationally...

Canada's decision to rescind the tax came "in anticipation" of reaching a broader trade agreement, according to government officials. With negotiations resuming, both countries will likely focus on addressing broader trade issues beyond the digital services tax.

In Last-Minute Move, Canada Rescinds Digital Services Tax, Restarts Negotiations More | Reply

In Last-Minute Move, Canada Rescinds Digital Services Tax, Restarts Negotiations

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  • We're ready for more national firewalls (Score:3, Interesting)

    by butt0nm4n ( 1736412 ) on Monday June 30, 2025 @04:42AM (#65485486)

    Screw big tech. Way too much power and influence. No reason why countries cant grow their own digital services. Governments are failing to recognise this and letting Big Tech leach money from their economies. Big Tech is reliant on national infrastructures paid for by public money, comms, transport, law and education. They are taking us for a ride and your politicians are in their pocket.

    • Probably doesn't work for digital entertainment, though? No one really gets excited about a particular email provider, but people do want to see specific US-made movies, television, games, etc

    • Re: We're ready for more national firewalls (Score:4, Insightful)

      by fluffernutter ( 1411889 ) on Monday June 30, 2025 @06:47AM (#65485574)
      The tax was probably going to be difficult to enforce. If Trump is going to take that as a win than it was a good sacrifice to make. Once he has his thing to brag about he will concede more.

      I don't really see what motivation Canada has to negotiate anyway. Once Trump's tariffs kick in and the inflation pressure amplifies, Americans will be in the streets calling for his resignation. If the 'big beautiful bill' doesn't already do that. Trump is throwing pennies at the poor and hoping they will run the other way and not notice loss of healthcare and the fact that the wealthy got so much more than they did.

      • Canada needs to negotiate because Trump doesn't care about Mutually Assured Destruction.

        Unfortunately for the rest of the world, as long as you have meaningful exports to the US that aren't impossible (economically) for them to replace from somewhere else you simply don't have a good point of leverage. The US can't replace China... but there are very few other examples. If Canada were to impose an export tax on oil and lumber to the US then it simply causes short term pain for the US and long term pain fo

        • What does the US make that isn't made somewhere else in the world? Canada has the closest ocean point to Europe. Already China beats the US on price for most things even if it has to be shipped. Canada currently has ports in Vancouver and Halifax there is another one in Hudson's Bay that can open very easily. They are talking about building at least two more. All of this will be good for Canada's economy in the end.
          • That's why the answer to Trump's (or anyone who tries to bully you in this manner) demands are to concede FOR NOW, while you make arrangements elsewhere so at a point in the future you can either:
            A) Return his brinkmanship in kind, or
            B) Just sever ties and move on to more friendly nations.
            • Seeing as only one country (I believe the UK) made a deal with Trump..... I'd say most picked option B. And the UK didn't have much at stake.. basically the luxury car brands.

          • What does the US make that isn't made somewhere else in the world?

            Fast food, movies, television. That's about it.

      • Re: We're ready for more national firewalls (Score:4, Informative)

        by ArchieBunker ( 132337 ) on Monday June 30, 2025 @08:19AM (#65485666)

        Once Trump's tariffs kick in and the inflation pressure amplifies, Americans will be in the streets calling for his resignation. If the 'big beautiful bill' doesn't already do that. Trump is throwing pennies at the poor and hoping they will run the other way and not notice loss of healthcare and the fact that the wealthy got so much more than they did.

        Won't happen because cult leaders are never wrong. Anything bad happening is Biden's fault. At least that's what Fox will tell people.

        • I don't think a cult leader would last long or have much of a cult if he/she starved the cult members. At a certain point desperation sets in and it doesn't matter. The things that Trump has done already has caused a lot of people who supported him to speak out against him. Apparently a lot of people who voted for him didn't hear in his speeches about how their job was going to be shitcanned as soon as he took office, among other things.
          • No amount of abuse have so far made other cults leave in droves, and look at countries like North Korea, Iran and Russia.
            • I was only able to find a known instance of it happening once. The important thing to understand is that the cult leader first convinced people to starve themselves. I doubt even Trump can do that with the American population.
      • Ed sat there while Trump talked and talked and talked and talked and talked. At the end of the conversation Trump had given up everything he wanted and Ed had made out like a bandit.

        Trump is famous for being a terrible negotiator among anyone who is paying attention. The news media has been covering that up now for about a decade.
        • Well you can't be very good to have to break laws and still have at least 6 bankrupt businesses. To have to play voting populations to get that edge instead of just having a realistic campaign. America is a funny place, it seems they don;t know the difference between being shrewd and being a bully.

      • Once Trump's tariffs kick in and the inflation pressure amplifies, Americans will be in the streets calling for his resignation.

        Some will. His devouts will think something along these lines:

        "Sure, prices are high, but that's because they are attacking the US, and killing babies, and mutilating children, and then grooming those mutilated children into going to their secret pizzeria underground dungeons where they're raped and then sacrificed to Beelzebub, all the while their invading hordes of international military cat-and-dog eating gangs roam the cities causing riots, because they hate 'Murica and must be stopped! And He's stoppin

  • works !

    • Re: (Score:1, Informative)

      by AmiMoJo ( 196126 )

      They should remember TACO. You don't fold to Trump, you wait him out.

      • Re:Bullying... (Score:4, Insightful)

        by Anonymous Coward on Monday June 30, 2025 @06:26AM (#65485558)

        At the risk of pointing out the obvious, how did that work out for Mark Carney? Or Iran? Maybe Canada shouldn't have overplayed its hand by threatening a retroactive tax.

        • The rest of the world is simply ignoring Trump. He's resorted to sending out physical letters because they don't return his calls. https://www.yahoo.com/news/tru... [yahoo.com]

          • The world is not ignoring Trump.

            If people ignore him too much, he renames the Gulf of Mexico or something nonsensical to regain attention.
        • Lol.. on the contrary, that's how all negotiation works and Trump is so easily played this way. Negotiating 101 is that you start with a scenario that is highly undesirable to the other party so that you can drop things without really affecting yourself and then ask the other side for something. Whether it was intended or not, Trump got laser focused on this tax and so what harm is it for Canada to stop a tax that is questionable in the first place? Now Trump is just happy that he can gloat about influen

          • Re: (Score:2)

            by Luckyo ( 1726890 )

            They didn't get anything in exchange for this action in addition to what they already had. All they got was americans agreeing that they will continue negotiations Trump stopped two days ago in response to this law. And Americans likely added a few more points to the agenda limiting taxation capabilities of Canadian state.

            So all that happened is that Trump just called another bluff. This was a Canadian mistake similar to one Trump made when he stated memeing about annexing Canada, getting a much less friend

        • At the risk of pointing out the obvious, how did that work out for Mark Carney? Or Iran? Maybe Canada shouldn't have overplayed its hand by threatening a retroactive tax.

          How did it work out, let me get you straight. When Trump announces a ridiculous new punitive tax like 100% on inbound moose nuts, then TACOs a week later you say it was a brilliant negotiation strategy because the real 4d chess goal was to gain things like .... uh, IDK, this? Which is a net gain because no math allowed we say so.

          Then when another country announces a dumbass punitive tax and later drops it, you say haha, got'em. Like you can't see they did the same thing back to you to show how dumb it is an

  • and stop pretending Canada has sovereignty. Otherwise Canada is just asking to be whipped and humiliated in front of the world.

    • Re: (Score:2)

      by bgarcia ( 33222 )

      Well, yes, Canada belongs to the Commonwealth of Nations, which is why King Charles has to approve every law that they try to pass.

      https://en.wikipedia.org/wiki/... [wikipedia.org]

    • Canadians value life and living, which means they would never fit in with the US. It would actually swing the US very far to the left, do you want that?
      • Yes. Because "far to the left" is actually just moving towards the centre when you're that far to the right. USA fails it's people in so many ways. It's not a poster child to model yourself on.

      • Re: (Score:1, Troll)

        by Ol Olsoc ( 1175323 )

        Canadians value life and living, which means they would never fit in with the US. It would actually swing the US very far to the left, do you want that?

        You kind of expose your pre-judgement of an entire nation. How progressive!

        And you really do hate the USA, eh? You know how I know that? It isn't prejudice, it is your postings telling us the nature of your character. Not prejudice but evidence. Tell me - let's say the US meets the end you wish - Who do you want taking over the world?

        Name the nation.

        • I don't need to pre-judge. Every poll on global happiness and life expectancy demonstrates it.

          • Re: Vassal state should behave like one (Score:5, Insightful)

            by Ol Olsoc ( 1175323 ) on Monday June 30, 2025 @09:47AM (#65485830)

            I don't need to pre-judge. Every poll on global happiness and life expectancy demonstrates it.

            Interesting, Wanna know who is unhappiest? Liberal women. https://ifstudies.org/in-the-n... [ifstudies.org]

            Interesting isn't it? Is this one of those polls about what 'Murricans are unhappy? Perhaps one needs to dig in deeper.

            Rather than work through problems by toughing it out, as conservatives tend to do, modern liberal people tend to use mental problems and "trauma" as a flex. I've experienced a bit of that in person, with some people whine bragging about all the psych meds they are on. And a lot of other validation comes from social media.

            Liberals, especially liberal women tend toward "catastrophizing" thinking. Tiny things are doom and gloomed into needing multiple anti-depressants and now atypical antipsychotics. And yet, the USA has not become a real life "The Handmaid's Tale".

            Somewhere along the line, mental strength became toxic, and weakness became a virtue. If you think you have to be depressed, you will be, and given the strange concept of believing drugs are the answer, Pharma will supply you. The weakness principle as a flex is one of the reasons the Democrats were curb stomped I the last election.

            The USA is performing a bit of a course correction. Some is good, some perhaps not so good.

            Noted, you refuse to answer my question. Human nature won't put up with a vacuum, and if you get your dream realized, some country will step forward. Who do you want that country to be?

  • Wrong Move... (Score:3)

    by Rashkae ( 59673 ) on Monday June 30, 2025 @05:42AM (#65485530) Homepage

    I hope that means Digital Services sold in Canada will now have to collect and remit GST, just like everyone else. Otherwise, Gov't must stabbed Canadian Companies in the back! (not that I want to pay more tax, but giving US companies a 13% price advantage over Canadian companies is *huge*. Digital tax has to either be evenly applied, or scrapped altogether for everyone.

    • Re: (Score:2)

      by nuggz ( 69912 )

      They already do.
      At least Facebook, Netflix, do

      • Re: (Score:3)

        by Entrope ( 68843 )

        There's been a broad obligation to do that for four years: https://www.canada.ca/en/reven... [canada.ca], although maybe some companies claim their goods or services are exempt. Google, for example, apparently collects and remits GST/HST for sales through its platforms unless the seller provides documentation that a Canadian official has determined that the good or service is exempt.

  • Canada should have... (Score:5, Funny)

    by YuppieScum ( 1096 ) on Monday June 30, 2025 @05:47AM (#65485532) Journal

    ...called it a "tariff" instead of a "tax," then we could all have delighted in the display of cognitive dissonance south of the border.

  • US raises tariffs on things: "Trump shouldn't put a tariff on incoming goods because it's all going to go to the price the US consumer will ultimately pay; a tariff on foreign goods is going to be paid by US consumers!"

    Canada raises tariffs on things: "You go girl! Show your national strength resisting foreign economic hegemony ! "

    • You are comparing apples to oranges. Trump's action was an initiation and Canada's action was a response. There wasn't much else Canada could have done, as a lack of response would have been viewed as weakness. We will see who needs whom more. Automatically the price of US automobiles will go up around $12k for the steel. The summer is estimated to be when suppliers can no longer hold out offering the same prices.

      • Re: (Score:3)

        by Entrope ( 68843 )

        Canada's Digital Services Tax was promised in 2019 and passed in 2024, so it's pretty safe to say it was not "a response" to anything Trump did as president. https://www.cbc.ca/news/politi... [www.cbc.ca]

        • You lost me. I thought we were talking about tariffs.

          • Re: (Score:2)

            by Entrope ( 68843 )

            Perhaps you missed The Fine Headline ("In Last-Minute Move, Canada Rescinds Digital Services Tax, Restarts Negotiations", emphasis added) and the rest of TFS? I am sure you were not being intentionally off-topic....

  • Operational flexibility is one of Trump's tactics. If something hits a brick wall, just ignore the mistake, claim it was a negotiation tactic, or say you didn't mean it at all.

    Also, do something to annoy your opponent to keep your opponent's attention focused on minutia.

    +1 Carney.
  • I would still love to hear someone actually ask/tell Trump if he even understands that a trade deficit isn't the same as being ripped off. Of course Canada has a trade deficit with the US. They have 10x less people so they need less US good in comparison. As far as Canadian tariffs on milk, etc. I learned years before Trump was ever elected that the us HEAVILY subsidies American milk producers. So much that Canada could not compete, hence the tariffs in order to not completely destroy the Canadian milk

  • If it moves, taxit.

  • This was IMO a dumb move on Carney's part. He should have suspended the tax just so long as negotiations were under way. Now Canada has one less point of leverage.

    Though I suppose if things go badly, the tax can always be resurrected.

    And selfishly, the tax would not cost me anything because I don't buy or use products or services from any companies that would be affected. :) (No Netflix, Amazon, Meta, etc.)

    • Trump won't understand the point being made by flip flopping other than thinking they are "tough" like him. He can't grasp somebody mirroring his idiocy to make a point.

      So maybe not.
      I'd say TACO but Canada is the one Trump treats the worst, even more than China. They can't simply wait for TACO.

  • It is likely as part of the negotiations that Trump will cave in and they will introduce a similar tax - but this will spun as a triumph for Trump ...

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