US President Donald Trump announced the termination of all trade discussions with Canada after his claim that Canada had started applying a tax on digital services, and threatened to impose new customs duties next week.
Trump wrote on Friday on social media: “Based on this fatal tax, we are completed by all trade discussions with Canada, with an immediate impact. We will reach Canada with the customs fees that it will pay to deal with the United States of America during the next seven -day period,” Trump wrote on Friday.
The Canadian Standard and Canadian stock index fell in the wake of Trump’s statements.
Canadian Prime Minister Mark Carney and the Canadian Ministry of Finance have not issued any immediate response to suspension requests.
July 9 deadline
Dozens of countries face a final deadline on July 9 to re -impose the customs duties imposed by Trump, and have been involved in negotiations with the United States. This group does not include Canada and Mexico. The President imposed customs duties on the neighbors of the United States in North America earlier this year due to the smuggling of fentanel and immigration, and talks were managed with them on a separate path.
Also read: Trump confirms his threat to impose customs duties in July
US Treasury Secretary Scott Besent said on Thursday that the group of the seven countries will suspend the digital services taxes imposed on American technology companies, in exchange for Republicans in Congress rejecting a “reprisal tax” proposal for foreign investors. But it is not clear whether US allies have agreed to this arrangement. Canada is a member of the group of seven countries.
However, Canada is preparing to move forward in imposing the tax, as the first payments are scheduled to be paid on Monday. The country’s business groups have opposed this tax, on the pretext that it will increase the cost of services and will call for a revenge response from the United States.
Canada waved the raising of the fees on the American steel and aluminum next month
A group of 21 American legislators wrote to Trump earlier this month, asking him to pressure to cancel the tax, estimating that they would cost American companies two billion dollars. In his commercial campaign, Trump has always criticized taxes and other non -customs barriers, describing it as an obstacle to American exporters.
What is the Canadian digital services tax?
Canadian digital services tax, similar to those applied by some other countries, including the United Kingdom, equals 3% of the revenues of the digital services achieved by any Canadian user company whose revenues exceed $ 20 million ($ 14.6 million) annually. This tax will be applied to social media companies, such as “Mita”.
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However, Canadian Finance Minister Francois Philip Champine hinted last week to reporters to the possibility of re -negotiation on the digital tax in the context of trade discussions between the United States and Canada. He said: “It is clear that all of this is something we study in the context of broader discussions that you may drag.”
