Canadian prime minister makes shocking U-turn after Donald Trump accused them of âblatant attackâ
Mark Carney is hopeful the decision will reignite trade talks between Canada and the US
Canadaâs prime minister Mark Carney has confirmed a U-turn on a digital services tax after Donald Trump accused the country of a âblatant attackâ on certain companies in the US.
Trump blasted Canada in a statement on Truth Social after leaders shared plans to collect payments on the digital services tax, which would be applied retroactively to 2022.
The tax would impact companies such as Amazon, Google, Meta, Uber and Airbnb by introducing a three percent levy on revenue from Canadian users, and the retroactive nature of the tax meant US companies would be left with a $2 billion bill, with the first payments due today (June 30).
Needless to say, Trump wasnât impressed with the notion and slammed Canada online, describing the tax as a âdirect and blatant attack on our Countryâ.
Trump described the tax as âegregiousâ (Tasos Katopodis/Getty Images)
âThey are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also,â Trump continued. âBased on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.â
In the wake of Trumpâs decision to end all trade talks, Carney confirmed that Canada would not move ahead with the tax âin anticipationâ of a trade deal that would be mutually beneficial for both the US and Canada.
The U-turn was announced on June 29, with the Department of Finance Canada saying in a statement: âThe DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians.
âCanadaâs preference has always been a multilateral agreement related to digital services taxation.â
The U-turn on the tax is intended to reignite trade conversations (Anna Moneymaker/Getty Images)
Commenting on the decision, Carney added: âTodayâs announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this monthâs G7 Leadersâ Summit in Kananaskis.â
While Francois-Philippe Champagne, Canadaâs minister of finance and national revenue, said: âRescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.â
