Canada Scrambles to Avoid New Import Taxes as White House Sets July 9 Deadline
The global trade landscape is on edge as President Donald Trump announced he won’t extend the 90-day pause on tariffs for most nations beyond July 9.
This declaration means countries without a new trade agreement with the United States could soon face substantial import taxes, with the administration signaling letters will go out “pretty soon” to notify them of impending penalties that could reach as high as 50%.
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In a significant move just days before the deadline, Canada swiftly rescinded its controversial Digital Services Tax (DST) on Sunday. This decision directly aims to revive stalled trade negotiations with the U.S., a move prompted by President Trump’s strong condemnation of the DST as a “direct and blatant attack” on American technology companies.
Canadian Finance Minister François-Philippe Champagne stated the tax revocation was “in anticipation of a mutually beneficial comprehensive trade arrangement,” with Prime Minister Mark Carney confirming that talks will now resume, targeting a July 21, 2025, deadline for a new deal.
Trump had previously acknowledged the difficulty of striking 90 deals in 90 days with “200 countries,” but he remains firm on the July 9 expiration. This renewed pressure underscores the administration’s “America First” trade policy, which prioritizes reducing trade deficits and promoting domestic manufacturing through tariffs.
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The impact of these potential tariffs on global economies is a major concern. Analysts predict significant contractions in trade and disruptions to supply chains, with some projecting a substantial decline in global trade volumes. The recent tariff escalations this year have already led to increased prices for consumers in the U.S. and raised concerns about economic growth.
The decision by Canada to drop its tech tax signals a willingness by some nations to make concessions in the face of U.S. tariff threats. However, it remains to be seen how other countries will respond as the July 9 deadline approaches and the prospect of new trade penalties looms large.
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