Welcome to the latest episode of the trade showdown between the US and Canada! Canadian Prime Minister Mark Carney and US President Donald Trump have entered a real ring fight over a digital tax that could have cost American tech giants a whopping two billion dollars! Yes, you read that right – two billion! It all started when Canada decided to impose a 3% tax on the revenues of American tech firms like Amazon, Google, Meta, Uber, and Airbnb operating with Canadian users. This tax was supposed to be retroactive, meaning American companies would have to pay for the entire previous period. Trump immediately jumped up, calling Canada’s move a “direct and flagrant attack” on the US and halted trade talks with Canada.
But the drama didn’t stop there! The Canadian government quickly reacted and withdrew the tax plan, allowing talks to resume. Prime Minister Carney and Trump even spoke on the phone and agreed to continue negotiations aiming to resolve everything by July 21, at the G7 summit. Canadian Finance Minister François-Philippe Champagne spoke with his US counterpart Scott Bessent, emphasizing that withdrawing the tax opens the door for progress in trade relations and economic security.
But wait, it’s not just about the digital tax! Trump has also imposed hefty tariffs on Canadian steel (50%) and aluminum (25%), as well as on cars (25%). There is also a possibility that tariffs could be increased after July 9, when the negotiation period expires. All this further complicates relations between the two neighbors and major trading partners.
Political science professor at McGill University, Daniel Beland, believes Canada’s withdrawal is a clear win for Trump, who forced Canada to back down from a tax that big tech companies hated. This saga shows just how tense trade relations are today and how digital economies have become a new battleground.
So next time you order something from Amazon or use Uber in Canada, remember this almost sparked a billion-dollar trade war! What do you think – should Canada have stuck to its plan or is Trump right? Drop a comment, let your voice be heard in this digital drama!
