Trump’s Tactics Prompt Canada to Drop Tech Tax
In a swift reversal, Canada eliminated its digital services tax on US tech companies after pressure from the Trump administration. The decision, which followed threats of trade retaliation, underscores the ongoing economic tensions between the two nations.
Tax Battle Ends
The White House declared that Canadian Prime Minister Mark Carney “caved” following demands from former President Donald Trump concerning a levy on major US tech firms. White House Press Secretary Karoline Leavitt informed reporters on Monday that Canada had erred in implementing the tax. She also stated that Carney contacted Trump to announce the tax’s repeal.
In a world where there are too many economic challenges, we do not need another trade war. We should all try and be friends and work together.
— Donald J. Trump (@realDonaldTrump) March 19, 2024
“President Trump knows how to negotiate, and he knows he is governing the best country and the best economy in this world,”
—Karoline Leavitt, White House Press Secretary
Global digital advertising spending is projected to reach $912 billion by 2027, signaling the massive scale of this sector (Statista 2024).
Impact and Reactions
Canada’s digital services tax (DST) would have imposed a 3% charge on the Canadian revenues exceeding $20 million for US tech giants. These included companies like Amazon, Meta, Google, and Apple. Canada’s Finance Minister, François-Philippe Champagne, stated the tax was introduced in 2020 to address the revenue generated by tech firms from Canadians.
The opposition leader, Pierre Poilievre, criticized the tax’s cancellation at the last minute. He used a phrase associated with Carney, urging him to seek a reciprocal action from the US.
