Just as trade relations between two of North America’s closest allies appeared steady, a new economic disagreement has sparked renewed tensions between the United States and Canada.
At the center of the conflict is a proposed Canadian digital services tax, which has drawn strong criticism from U.S. leaders, including former President Donald Trump.
A Surprising Rift Between Allies
President Trump, 79, and Canadian Prime Minister Mark Carney, 60, have both been known for their direct leadership styles. Though they reportedly shared a mutual respect in the past—Trump was said to admire Carney’s experience as a former central banker—that understanding may now be strained.
Canada recently announced a 3% digital services tax targeting large multinational technology companies. The tax, set to apply retroactively to 2022, affects global firms such as Amazon, Meta, Google, and others with significant user bases in Canada. Companies earning more than $14.6 million annually from Canadian users would be subject to the new tax. Reports estimate the total retroactive amount could reach up to $2 billion.
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