USCIB Statement on Canadian Digital Services Tax

USCIB was disappointed that on June 28, Canada moved forward with its discriminatory and retroactive Digital Services Tax. Taking this step to implement a measure that targets US companies is inconsistent with Canada’s international commitments, will serve to undermine the US-Canada trade relationship, and will set a dangerous precedent for other countries to copy — all to the detriment of the international tax and trade systems.

As we, and numerous other industry groups recommended in our recent letter to US Trade Representative Katherine Tai, the US must take prompt and decisive action and initiate formal dispute settlement procedures with Canada through consultations under the US-Mexico-Canada Free Trade Agreement (USMCA). The increased costs of these actions will be felt by small businesses and other consumers of targeted products and services, stoking inflation.

USTR has already found less egregious measures to be unreasonable, burdensome, and discriminatory. Our trade agreements are only protective of US interests to the extent we can expect our trading partners — particularly with strong geographic and economic connections — to follow the terms of our agreements. Congress, on a bipartisan basis, has frequently reiterated this important point. The world is watching, and it is critical that the Administration responds to these discriminatory actions.

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