He said the tax was a “direct attack on our country”; he threatened to impose new tariffs on Canada, which will be announced in 7 days.
Prime Minister Mark Carney announced that Canada would continue negotiations to protect the best interests of Canadian workers and businesses.
An hour later, he clarified that he had not spoken to Trump directly on the matter, but stressed the “complexity” of the negotiations.
Under Canada’s Digital Services Tax Act (effective: June 28, 2024), large US tech companies (Google, Amazon, Meta, etc.) are subject to a 3% tax on revenues, effective from 2022, and the initial bill is estimated at about $2 billion. Trump and business circles have said that the tax is similar to the European Union model, and the US is considering the possibility of launching a Section 301 investigation for retaliatory tariffs.
Financial markets saw a downturn after Trump’s decision, although the S&P 500 and the New York Stock Exchange returned to strong levels by the close. Traders and business councils say that continued government intervention has increased the risk of escalating trade tensions and affecting the prices of products and services.
The Canadian Business Council and government circles are pressing for the tariffs to be immediately suspended or eliminated so that trade talks can resume. Opposition political parties are urging Canada to adopt a friendly approach to maintain access to the US market.