US requests trade dispute consultations with Canada over new digital services tax

Source: Reuters

August 30, 2024 9:01 PM EDT Updated 11 hours ago


WASHINGTON, Aug 30 (Reuters) - The U.S. has requested trade dispute settlement consultations with Canada over its new digital services tax, the Biden administration said on Friday, adding that the "discriminatory" tax appears inconsistent with Canada's North American trade deal obligations.

The U.S. Trade Representative's office said in a statement that it will work with Canada to resolve U.S. concerns over the new tax enacted in June, through the consultations. But if an agreement cannot be reached after 75 days, it may request a dispute settlement panel under the U.S.-Mexico-Canada Agreement on trade (USMCA).

The request for consultations is the first step in the USMCA's dispute resolution process, which ultimately could lead to the imposition of retaliatory U.S. tariffs on imports from Canada. In Ottawa, a Canadian government official said the U.S. move was not concerning or a surprise. The official, who requested anonymity given the sensitivity of the topic, said the challenge was part of a conversation between the two nations.

The U.S. government has repeatedly objected to the planned Canadian tax. The offices of Canadian Finance Minister Chrystia Freeland and Trade Minister Mary Ng were not immediately available for comment.

Read more: https://www.reuters.com/markets/us-requests-trade-dispute-consultations-with-canada-over-new-digital-services-2024-08-30/