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Canadian software could be in Donald Trump’s sights for tariffs, technology lawyers warn
Digital products exempt from customs duties, fees, other charges under CUSMA, but ‘everything is thrown up in the air,’ Dentons lawyer warns as U.S. President readies retaliation for digital services tax
Ever since U.S. President Donald Trump started moving to impose sweeping tariffs on Canada, many software entrepreneurs here have cautiously assumed they would be exempt, particularly since computer programs are now primarily shipped digitally over the internet, not on compact discs. Last week, the U.S. President said he would sign a memo compelling the Office of the U.S. Trade Representative to suggest retaliatory actions such as tariffs on Canada and dozens of other countries that have moved to impose a digital services tax (DST) on American tech companies, Bloomberg reported. Katy Pitch, a partner with law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC in Toronto specializing in cross-border corporate income tax, said Mr. Trump “could use U.S. tariffs on Canadian software as a sword to get Canada to back off on the DST” as a negotiating tactic, though she agreed “it would be quite complicated” to put into effect.
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