Friday June 27, 2025 | VICTORIA, BC [Posted at 5:30 pm PT | Updated 6:50 pm PT]
Political analysis by Mary P Brooke | Island Social Trends
The tech giants are clearly unhappy about paying Canada’s digital tax, as a June 30, 2025 payment deadline looms.
In a Friday afternoon post in social media, US President Trump said he is “terminating ALL discussions on Trade with Canada” in response to what he says about Canada having “just announced that they are putting a Digital Services Tax on our American Technology Companies”.
Of course Canada and Carney’s trade negotiation team have to deal with this, but they seem to be learning. The response has been minimal and almost non-responsive.
The tax was not ‘just announced’. It was legislated a few years ago.
“It’s not going to work well for Canada. They were foolish to do it,” said Trump today.
The big tech companies are required to pay a 3% levy on revenue from Canadian users, retroactive to 2022. The amount is about two billion dollars, due at June 30, 2025. The tech firms knew for a long time this day was coming.
Amazon, Google, Apple, Meta, Airbnb and other big tech companies need to pay up starting June 30, 2025.
Last minute hammer:
It’s a big deal if the US stops talking to Canada about trade. But there is so much complexity in Canada-USA trade that one point probably cannot stop the overall process of negotiations.
So on Trump’s part it’s a bit more of the same tendency to “cry wolf”., i.e. issue an urgent alert where none is needed. He issues these threats so often that their impact is becoming less harsh and probably just means riding out another negotiation bump in the road.
This Friday afternoon threat is probably more about keeping his billionaire tech friends happy. They probably complained and sought Trump’s powerful support. Trump clearly felt obligated to respond. Likely within a few days this will be sorted out, if only by just dissolving away as a meaningless threat.
It seems like a last minute hammer, but likely by the end of next week this too will have passed.
Waste of time, wear and tear:
What a time waster for Canadian politicians and senior government. The worst of all of this is the wear and tear. Trump is trying to grind Canada down. Hopefully our elected officials remain resilient and resolved to their program of ‘making new friends’ (i.e. establishing trading relationships with more stable and reliable partners).
Yes, Trump has “all the cards”, as he said today. The United States is big, powerful and well-resourced. But they are unpinning their goodwill with long-time allies, one loose threat at a time.
“We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump added.
Frankly, these continual up and down tariff threats are becoming tiresome. Meanwhile, one hopes it’s an approach of ‘steady as she goes’ for the diversification of the Canadian domestic and international trade program — by both the federal government and provinces.
One strong Canada:
Too bad this comes ahead of Canada Day, a date that Prime Minister Carney has earmarked as his own deadline for creating ‘one strong Canada’. Legislation did pass last week in the House of Commons for the federal government to do its part to drop domestic federal trade barriers and speed along projects ‘in the national interest’ as part of boosting and fortifying Canada’s economy (including investment and jobs).
Reactions in Canada aren’t helpful to the calm approach that Carney’s team is taking. The Business Council of Canada has called on Ottawa to suspend the tax. “Canada should put forward an immediate proposal to eliminate the DST in exchange for an elimination of tariffs from the United States,” wrote the group’s CEO Goldy Hyder, adding Trump’s decision is the “unfortunate development” the group had warned about.
BC response:
Today’s threat from the US President was described by Premier David Eby as “another example of the instability and unpredictability of this president”
“And underlines the crucial importance of the work that is being done at the federal level, at the provincial level, at the municipal level to diversify our relationships around the globe, to make new friends, to ensure that we are trading with and strengthening in partnership with those countries that want to partner with us,” said Eby during a press conference in Vancouver today.
“I hope that this is a temporary setback. The idea that the president is going to rescue us or is going to solve this problem for Canadians I think certainly has been put to rest. This is up to us. It’s up to Canadians and what better day than Canada Day to reconfirm our commitment to ensure that we are a sovereign independent strong country with friends in many places around the world and reduce our dependency on the United States,” said Eby.
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NEWS SECTIONS: CANADA-USA | TRADE & TARIFFS