US cancels trade negotiations with Canada

President Donald Trump has announced that he is terminating all trade negotiations with Canada, calling Canada's move to impose a digital services tax a "direct and blatant attack." The decision takes effect immediately.

“We will let Canada know the tariffs they have to pay to do business with the United States in the next seven days,” Mr. Trump affirmed on June 27 (local time).

The Digital Services Tax Act was approved by Canada on June 20, 2024, and took effect on June 28. Under this act, companies with digital service revenue from Canadian users of more than $14.6 million/year will be subject to a 3% tax rate.

202401044603da43e35b4fc7813277cd2e45acb0_xxjidwe007027_20240104_cbmfn0a001.jpg — President Donald Trump. *Photo: Xinhua*

Businesses have called on Canada to suspend the tax, fearing it would increase the cost of providing services and avoid the risk of angering the US government . But so far, Canada has refused and will start collecting the tax on June 30.

Canadian Finance Minister Francois-Philippe Champagne has said that a digital services tax could be negotiated as part of trade discussions with the U.S. The two sides had been expected to reach a deal by July, but that scenario has become more tenuous after the latest move from President Donald Trump.

In a statement the same day, the Office of Canadian Prime Minister Mark Carney said the government will continue to negotiate with the US for the benefit of workers and businesses.

In a related development, Vina Nadjibulla, Vice President of Research and Strategy at the Asia- Pacific Foundation of Canada, commented that President Trump's announcement of canceling trade negotiations with Canada is an escalation.

In that context, Canada will need to find a way to resolve the issue rather than give in. The country can coordinate with the European Union (EU) and other partners before making an appropriate response, especially since the digital services tax is also part of the negotiations between the US and the EU.

Experts say the tariff policy targeting Canadian goods is detrimental to both Canada and the US because it will increase the cost burden for businesses, directly affecting consumers.

Canada is the second largest trading partner of the US, after Mexico. In 2024, this country bought 349.4 billion USD of goods from the US and exported 412.7 billion USD to the US market. The US tariff policy has affected the export of steel, aluminum, and cars of Canada. The country's economy has also begun to decline with the unemployment rate at 7%.

(According to Aljazeera, Xinhua)

Source: https://hanoimoi.vn/my-huy-dam-phan-thuong-mai-voi-canada-707092.html