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In Last-Minute Move, Canada Rescinds Digital Services Tax, Restarts Negotiations (newsweek.com) 134

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:5, 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:5, 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.

          • 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.

            Pharmaceuticals, plastics, and a fairly large amount of high-end electronics and machinery are directly imported. The bulk of Canadian goods still come via US ports, even adding a couple is unlikely to change that. The real sting is on the other end though. Canadian trade in things like lumber, metals, cereal grains and finished goods would struggle to find export markets anywhere near the size of the US.

            In general, large trade barriers between a small nation and a much larger adjacent nation don't tend to

      • 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.

      • 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

      • Re: (Score:2)

        by tlhIngan ( 30335 )

        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.

        That is probably the calculus behind it. You have to remember the G7 agreed to a minimum income tax which includes a DST, just Canada and France implemented it early.

        This was a huge thorn in Biden's side, and Biden himself was trying to get it rescinded. No doubt in another timeline, Kamala Harris would be challenging it

  • 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.

  • 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.

  • 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 ...

  • I think I only vaguely understand what this tax is. Taking Google for example, are we saying Google's ad revenue collected by clicks done by Canadians are considered taxable?

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