Digital tax implementation begins in Canada - move aiming at trade negotiations with Trump
In a significant development, Canada has rescinded its plan to impose a digital tax on US tech companies, paving the way for the resumption of trade talks with the United States. The digital services tax, introduced by Ottawa last year, was seen as a contentious issue that had strained trade negotiations between the two countries, particularly concerning US tech giants like Alphabet and Amazon.
The digital tax, due to come into effect on Monday, would have imposed a three percent levy on revenues from online advertising, sales platforms, online networks, and the sale of personal data. The move by Canada was aimed at facilitating progress in trade talks with the US and easing tensions related to the tax's impact on American tech companies.
The decision follows President Trump's threat of new tariffs, citing Canada's planned digital tax as a "direct and brazen attack" on the US. The US President had earlier imposed high tariff hikes on numerous states, which he later reduced to 10 percent for most countries for 90 days.
Negotiations will be held during this 90-day period. Trump's spokeswoman, Karoline Leavitt, has suggested that the deadlines could possibly be extended. The deadline for the EU is July 9, while for Canada and numerous other countries, it is July 8.
Trump's trade and tariff policies have repeatedly caused turmoil on stock markets in recent months. The digital tax, according to analysts, could have potentially cost US tech giants like Alphabet and Amazon billions.
The withdrawal of the digital tax is not without controversy. US economist Joseph Stiglitz, a Nobel laureate, has criticized Trump's actions towards Canada, calling it an "outrageous attack" on Canadian sovereignty. Stiglitz believes Trump's actions are about more than just trade, stating that it's about whether democratically elected governments can regulate and tax powerful companies.
As trade talks resume, both countries are expected to discuss various areas, with Trump using tariffs to extract concessions. The resumption of talks is a positive step towards resolving the trade tensions between the two nations.
- The community policy regarding the rescinded digital tax in Canada, pertaining to the revenues from online advertising, sales platforms, online networks, and the sale of personal data, influences the business practices of US tech giants like Alphabet and Amazon.
- In the realm of politics, the finance sector closely follows the trade negotiations between Canada and the United States, as tariffs and tax policies have significant implications for both countries' industries.
- The general-news media continues to monitor the ongoing trade talks between Canada and the US, as the resumption of negotiations is a significant development in resolving existing trade tensions and in understanding the broader implications of the interplay between government policies, business, and international politics.
