Canada's Digital Services Tax (DST), which targets large digital businesses with a 3% tax on revenues over $20 million in Canada, has become a major point of contention in U.S.-Canada trade relations. The tax applies to companies with global income of at least $1.1 billion and is retroactive to January 2022, potentially costing U.S. tech companies $2 billion in retroactive taxes and $2.3 billion annually going forward12.
The dispute has escalated dramatically under Trump's administration, with the president calling the tax "egregious" and "discriminatory"34. His administration views it as an unfair targeting of American tech giants, with Trump asserting that "only America should be allowed to tax American firms"5. Business groups on both sides of the border have opposed the DST, with the Canadian Chamber of Commerce warning it represents "a severe trade risk" to the relationship with Canada's largest trading partner2. Critics also argue the tax will ultimately be passed on to Canadian businesses and consumers, potentially worsening inflation1.
- https://farmtario.com/daily/trump-says-u-s-ending-trade-discussions-with-canada-over-digital-tax/
- https://www.cbc.ca/news/politics/trump-tax-impact-canada-1.7571016
- https://financialpost.com/news/economy/canada-dst-needlessly-inflammatory-trade-talks-us
- https://nanaimonewsnow.com/2025/06/27/trump-terminating-trade-talks-threatens-tariffs-over-ottawas-digital-services-tax/
- https://dig.watch/updates/trump-vows-tariffs-on-canada-and-france-over-digital-services-taxes
- https://www.osler.com/en/about-us/media-centre/trump-targets-canadas-digital-services-tax-with-america-first-trade-policy-cbc-news/
- https://www.cbc.ca/news/politics/trump-targets-canada-digital-services-tax-1.7438409
- https://globalnews.ca/news/11030201/trump-digital-services-tax-tariffs-canada/
- https://nationalpost.com/news/canada/canada-digital-services-tax-online-regulations-trump
- https://financialpost.com/technology/canada-digital-services-tax-survive-trump-tariffs
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