Canada’s unilateral push for digital-services tax could sink its U.S. trade deal
defended the DST decision, arguing that it’s “important for us to defend our national interest.” But it’s not clear how it’s in Canada’s national interest to go rogue when the United States, our most important trading partner, has repeatedly warned that doing so would violate the Canada-U.S.-Mexico Agreement .
The U.S. Senate finance committee – which has jurisdiction over trade deals such as CUSMA – urged Trade Representative Katherine Tai to challenge Canada’s DST “through dispute settlement, use of other tools available under U.S. laws, or other appropriate avenues.” As bad as retaliation would be, there could be an even worse impact. When Canada, the U.S. and Mexico negotiated CUSMA, the Trump administration at the time insisted that the agreement should be reviewed after it had been in force for six years. That review must take place before 2026 and likely requires U.S. congressional approval.
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