Canada's Digital Tax U-Turn: A Thorny Path to Trade Accord

Canada has shelved its proposed digital service tax on U.S. tech companies, aiming to smooth trade negotiations with U.S. President Donald Trump. Yet, tensions over Canada's agriculture policies, specifically its supply management system, remain a significant obstacle in discussions.

Despite political ease in abandoning the tax, Canadian Prime Minister Mark Carney faces complex challenges regarding Canada's entrenched dairy, eggs, and poultry controls. These have long frustrated U.S. trade negotiators, notably during the USMCA talks and beyond.

While digital tax removal relaunches discussions, Trump's threats of new tariffs and critiques of Canadian agricultural tariffs suggest that the journey to a new economic agreement is fraught with potential pitfalls.

(With inputs from agencies.)