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https://www.cnn.com/2025/06/27/business/trump-brea...


President Donald Trump ceased trade talks with Canada and will soon announce a new tariff rate the country will have to pay, he said in a Truth Social post on Friday.

The decision to end negotiations, which have been ongoing for several months, came after Canada announced a digital service tax, Trump said, calling it “a direct and blatant attack on our Country.”

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” he said.

Digital services taxes are a way for countries to tax online services, in contrast to taxes on physical products. Countries with these taxes can collect revenue from large companies that operate online — even if the business is unprofitable. American firms, especially Big Tech companies such as Meta, Apple, Google, Amazon and Microsoft, are disproportionately affected by DSTs, according to a report published last year by the nonpartisan Congressional Research Service.

Jeff

I decided to let an AI put together a definition of Digital Serices Tax:

A Digital Services Tax (DST) is a tax levied on the gross revenues of companies, particularly large multinational digital businesses, that derive revenue from the provision of digital services to users in a specific jurisdiction. It's essentially a tax on the total amount a business earns before deducting expenses, based on specific digital activities within a country's borders.
Here's how it generally works:
1. Targeting Specific Digital Services:
DSTs target specific digital services that generate revenue in a particular country, such as online advertising, digital marketplaces, the sale of user data, and the provision of digital interfaces.
Some countries have broadened the scope of their DSTs to include activities like streaming services, e-commerce, and software-as-a-service (SaaS).
2. Gross Revenue Basis:
Unlike traditional corporate income taxes which are based on profits, DSTs are typically levied on a company's gross revenues from the covered digital services within a specific jurisdiction. This means the tax is applied to the total revenue generated, regardless of whether the company made a profit.
3. Nexus and Revenue Thresholds:
DSTs often utilize revenue thresholds to determine which companies are subject to the tax.
These thresholds typically involve a combination of global revenue and a minimum amount of revenue generated within the taxing country's borders.
This approach is designed to capture the economic presence of digital companies even if they lack a physical presence in a country, addressing the challenge of taxing businesses that operate across borders without traditional brick-and-mortar establishments.
4. Calculation and Payment:
Once a company meets the revenue thresholds, they calculate the portion of their gross revenues from the digital services provided to users in the taxing country.
The applicable DST rate is then applied to this calculated revenue, and the resulting tax is paid to the relevant tax authority.
5. Distinction from Other Taxes:
It's important to note that DSTs are distinct from income taxes, online sales taxes, and Value-Added Taxes (VATs).
They are a form of gross revenue tax specifically designed to address the challenges of taxing the digital economy and ensuring that large digital companies contribute to the tax base in countries where they generate significant revenue.
In summary, a Digital Services Tax is a tax on the income generated from specific digital services provided within a country's borders, aimed at addressing the challenges of taxing digital companies that operate globally without a traditional physical presence.

Jeff

So are we going back to the tariffs are on, the stock market slumps, the tariffs are on hold, the market recovers cycle again?

"So are we going back to the tariffs are on, the stock market slumps, the tariffs are on hold, the market recovers cycle again?"

I'm confused, can't keep up with all of the TACOing and Waffling. We're coming up on
90 days from when Trump 1st said there was a 90 day pause on tariffs. But yesterday I think Bessent said that they expect to have many deals done by Labor Day. So that's approximately
another 90 days. This ain't no way to run a shakedown of our trading partners,lol.

I'm expecting inflation to keep ticking up, despite Trump's bloviating that domestic
companies better eat the cost of tariffs and not pass costs on to consumers. The
stocked up inventories have got to be dwindling. I heard today that port traffic in the LA
area has in no way picked up, so doesn't look to be much of an effort to get inventory
levels back up. Can't say I blame the companies, since Trump's story changes more than the
wind shifts.

So are we going back to the tariffs are on, the stock market slumps, the tariffs are on hold, the market recovers cycle again?

I had a similar thought: somebody wants to milk the market again.

Pete

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