Kevin Hassett on Trump Ending Trade Talks with Canada Over Digital Services Tax

Canada's Digital Services Tax Dispute

• 🇨🇦 Canada's digital services tax is described as an extraterritorial, criminal act, taxing American companies that may not have a physical presence in Canada.
• 💡 The tax is a 3% of revenue tax, not on profits, which Kevin Hassett argues is preposterous and unlawful.
• 🇺🇸 The US has stopped negotiating with Canada on this issue after Canada refused to delay the tax, which was set to take effect on June 30th.

Global Digital Tax Landscape

• 🇪🇺 Europe's digital sales tax situation is also discussed, with some European countries behaving better than Canada, while others maintain their digital services taxes.
• 🌍 The concept of Pillar Two, a global minimum tax that Janet Yellen agreed to, is criticized for allowing other countries to impose taxes if they deem US corporate taxes too low.
• 🚫 The US is committed to fighting these extraterritorial taxes, emphasizing that only the American legislature can tax American companies operating within the US.

US-China Trade Relations

• 🇨🇳 Regarding China, the rare earth minerals deal is moving forward, with finalized language and licenses being issued.
• 📝 The US believes the deal is progressing, with a whitelist of companies that China needs to supply.

Trade Negotiations and Stock Market

• 🤝 President Trump is open to making deals and may extend the pause on trade discussions if an agreement in principle is reached, though the fine print needs to be finalized.
• 📈 The stock market is experiencing rational exuberance, driven by optimism surrounding Trump's policies and the anticipated passage of a significant economic bill.
• 💼 Over 20 trade deal frameworks are currently underway with various countries, indicating active trade negotiations.