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The Canadian Finance Ministry, in its statement, expressed the possibility of talks between Prime Minister Mark Carney and US President Trump.
Canada has withdrawn its decision to impose digital service tax (DSS) on American technology companies late on Sunday night. The Canadian government was going to impose digital service tax on American companies from June 30.
The Canadian Finance Ministry said in a statement that the trade agreement between Prime Minister Mark Karney and US President Donald Trump may begin again on the trade agreement. Trump announced the cancellation of trade talks with Canada on 27 June.
Trump posted on Truth social and said that digital tax is a direct attack on American companies and will soon announce a new tariff on Canada. He said that in the next 7 days, Canada will be told how much tariff he will have to give to do business with America.
Digital service tax was passed in Canada last year The Digital Services Tax Act was passed on June 20, 2024 in the Canadian Parliament on June 20, 2024. However, this tax was to be implemented from June 30, 2025 after a year. A few hours before the implementation, the Canadian government took a U -turn on it.
After Trump’s talks over the tariff of Tram, Canada’s PM Mark Carney said that he wanted to continue talks with America in the interest of the people of Canada.
At the same time, America’s Treasury Secretary i.e. Finance Minister Scott Besant said that he was already feared to be imposed this tax. However, there was a conversation between the US and Canada about the tariff, so they hoped that the Carney administration would not implement it.
What is digital service tax? Digital services tax is the tax that is charged from online service companies. Large foreign and domestic companies, who are earning money from online users in Canada, will have to pay 3% tax on income. This law was also to be imposed on old bills from 2022, that is, companies would have to pay tax for the last several years.
This tax was about to apply to the earnings made from online marketplace, social media, online advertising and user data. This tax would apply to companies whose annual earnings are more than $ 800 billion.
This would have affected especially American tech companies such as meta, Google, Apple, Amazon and Microsoft. Traders estimate that this tax will lose more than two billion dollars every year. Along with this, 3,000 jobs can also go to America.
Tariff War damage to both US-Canada According to the data, Canada is the largest buyer in the US, bought US goods worth $ 349 billion (29.14 lakh crore rupees) last year and sold goods worth $ 413 billion (Rs 34.49 lakh crore) to the US.
If the US imposes high tariffs on Canada, Canada can also apply counter tariffs, which will damage the economy of both countries.
Trump put tariffs on Canada before Trump imposed several tariffs on Canada in his first term. At that time, threatened to impose 25% tariffs on all Canadian exports, but most Canadian goods were exempted from the tariff if they followed the USMCA (USA Mexico Canada Agreement) agreement. The USMCA agreement is a kind of free trade agreement that the Trump government brought in 2020.
Earlier, at the beginning of the year, Trump had threatened Canada that if he did not accept the terms of America, he would put economic pressure on it. After this, in April, Trump imposed 25% tariff on many Canadian items, in response to which Canada also imposed 25% tariff on many American goods. However, it was later postponed for some time by negotiating.