Canada Drops Tech Tax to Save Trade Deal with US – What It Means for You
(Source: BBC)
Canada has decided to cancel its new tax on big US tech companies like Amazon, Google, and Apple—just hours before they had to pay. Why? To restart trade talks with the US after President Donald Trump called them off, saying the tax was unfair.
According to the BBC, this tax would have charged US tech giants 3% on their Canadian earnings over $20 million. But now, Canada is backing down to avoid a trade war that could hurt both countries.
Why This Matters for You
- Higher Prices? Some Canadian business groups warned that if the tax stayed, tech companies might raise prices for users.
- US Power Play Trump said the US has “such power over Canada” and threatened higher tariffs if the tax wasn’t removed.
- Trade at Risk Since 75% of Canada’s exports go to the US, a trade fight could hurt jobs and the economy.
The BBC reports that Canada’s Finance Minister, François-Philippe Champagne, said the tax was meant to make tech giants pay their fair share. But with the US pushing back hard, Canada chose to drop it—for now.
What’s Next?
Trade talks will restart, but experts say Canada mishandled the issue by making the tax apply retroactively (meaning companies would owe money from past years). US lawmakers from both parties were angry, and even some Canadians opposed the tax, fearing it would just lead to higher costs.
As the BBC highlights, this is a big win for US tech companies—but will Canada find another way to tax them fairly? Stay tuned.
(Source: BBC)
https://www.bbc.com/news/articles/c62553ywn77o