Remember that digital services tax Canada imposed on the United States last week?
Well, it is now unimposed….coincidentally (yes, this is sarcastic humor) after President Trump responded by summarily cutting off all trade discussions.
From Lim Hui Jie’s article at cnbc:
Canada has walked back on its digital services tax “in anticipation” of a mutually beneficial comprehensive trade arrangement with the United States, Ottawa announced Sunday night, just one day before the first tax payments were due.
The move comes after U.S. President Donald Trump announced over the weekend that he will be “terminating ALL discussions on Trade with Canada” in response to Ottawa’s decision to impose a digital services tax on American tech firms.
“Today’s announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” Canadian Prime Minister Mark Carney said in the statement.
The first payments from Canada’s digital services tax, which was enacted last year and applies retroactively to 2022, were initially set to be collected Monday. The tax would have applied to both domestic and foreign tech companies, including U.S. giants such as Amazon, Google and Meta with a 3% levy.
Let me put this very simply: Canada needs the United States exponentially more than the United States needs Canada. And Canada damn well knows it.
So here’s a friendly tip for newly installed Prime Minister Mark Carney: you are in no positition to pull stunts like this with the United States. Certainly not when you’re starting up with a President who spent the last half century engaging successfully in hardball negotiations with building trades – companies and unions both – in New York City and other places around the country and the world.
You just played FAFO (Fuck Around, Find Out). And you Found Out. I hope for your sake the lesson was learned.
