#canada-us-relations

Canada is proceeding with its Digital Services Tax (DST), a 3% levy on revenue earned in Canada by large digital corporations, despite escalating threats of retaliatory tariffs from the United States. The U.S. government argues the tax unfairly targets American tech giants and is preparing potential countermeasures. The Canadian government defends the tax as a matter of fairness, ensuring that companies profiting from Canadian users contribute their fair share. This standoff places significant strain on Canada-U.S. trade relations and could have wide-ranging economic consequences for key Canadian export sectors if tariffs are imposed.

WikiLeaks founder Julian Assange has been freed after pleading guilty to a single US espionage charge, ending a 14-year legal battle. The deal, finalized in a Saipan courtroom, allowed him to return to his native Australia. While his release is celebrated by supporters, the case has profound implications for journalism and national security worldwide. In Canada, press freedom advocates are expressing relief but remain deeply concerned that the prosecution sets a dangerous precedent, potentially chilling the work of investigative journalists who handle classified information from allied nations.

As NATO prepares for its 75th-anniversary summit in Washington, Canada faces intensified pressure from allies to meet the alliance's defence spending target of 2% of GDP. Despite a recent policy update promising billions in new funding, projections show Canada will still fall short, currently spending around 1.37%. With the war in Ukraine and growing global instability, allies like the United States are publicly urging Ottawa to increase its commitment. The summit will be a critical test for the Trudeau government as it balances domestic priorities with its international security obligations.

The Biden administration has announced sweeping new tariffs on Chinese imports, including a 100% levy on electric vehicles (EVs), in a move to counter what it calls unfair trade practices. This action places significant pressure on Canada to implement similar measures to protect the highly integrated North American auto market. Without corresponding tariffs, Ottawa risks Canada becoming a dumping ground for low-cost Chinese EVs and other green technology products shut out of the US, potentially undermining billions in domestic investments aimed at building Canada's own EV supply chain.

The federal government has unveiled a comprehensive National Semiconductor Strategy, aiming to unify Canada's burgeoning chip industry under a single strategic framework. The plan seeks to bolster domestic capabilities in specialized areas like compound semiconductors and advanced packaging, while strengthening alliances with the United States and other G7 nations. By coordinating public and private investment, Ottawa intends to secure critical supply chains, foster innovation, and position Canada as a reliable partner in the highly competitive global technology landscape, moving beyond individual funding announcements to a cohesive, long-term industrial policy.

The Canadian government has announced new, stringent export controls on specific semiconductor technologies, aligning its policy with key international partners, particularly the United States. The measures, targeting advanced manufacturing equipment and sensitive intellectual property, are designed to safeguard national security and prevent critical technology from being used for non-allied military applications. This policy shift occurs as Ottawa simultaneously invests billions to expand its domestic chip industry, creating a complex balance between fostering innovation and managing geopolitical risks in the highly competitive global technology landscape.