Canada removes tax in favor of US trade talks: Canada has halted its digital services tax (DST) on US tech firms to get trade talks back on track after US President Donald Trump halted negotiations on Friday, Reuters reports. The tax was a main sticking point for the US, with Trump calling it a “direct and blatant attack” on the US before halting the talks. Canada is hoping that a bilateral comprehensive trade agreement with the US could be reached by 21 July, according to a statement from the Canadian finance ministry.

SOUND SMART? The Digital Services Tax Act mandates that large foreign and domestic firms pay a 3% tax on revenues earned from digital services. This includes services that rely on engagement, data, and content contributions from Canadian users, as well as certain sales or licensing of Canadian user data.

REMEMBER- The US is ramping up efforts to finalize a number of bilateral trade agreements ahead of the 9 July tariff deadline, with both the EU and Malaysia hoping to secure an agreement by the deadline or get an exemption if talks linger. The US and China finalized a minimal trade agreement last week, focused on rare earth materials delivery from China and the removal of some unannounced US export restrictions — likely on advanced microchips.

Watchdog hunt on Boeing’s Spirit acquisition: The UK’s main competition regulator is investigating Boeing’s USD 4.7 bn acquisition of US-based aerostructure manufacturer Spirit Aerosystems to determine the risk of minimized competition, Bloomberg reports. The antitrust watchdog — the Competition and Markets Authority (CMA) —will reveal its decision to either wrap up the probe or launch an in-depth investigation by 28 August.

IN CONTEXT- CMA is conducting the first phase of an antitrust probe into the acquisition, which is scheduled to wrap by mid-2025 after Spirit shareholders approved it in February. CMA started contemplating the probe last week — looking into whether the acquisition could influence market competition in the UK or in other markets. The transaction has a total value of USD 8.3 bn including the manufacturer’s debt. The inquiry “was anticipated and is part of the normal process for acquisitions of this nature,” a Spirit Aerosystems spokesperson told the news outlet.

REFRESHER- We first learned in July 2024 that Boeing was set to acquire Spirit through an all-stock purchase at USD 37.25 a share, with Boeing taking on the manufacturer’s reported net debt. Spirit also received up to USD 350 mn from Boeing in advance payments to stay afloat in November 2024 and continued to burn through banknotes.

Tags: