trump's tax plan: canada could be labeled 'bad country'

2025-05-30 general

washington d.c., Friday, 30 May 2025.
donald trump’s proposed tax bill, valued at $3 trillion, could trigger retaliatory tax measures against canada. section 899 of the bill targets countries with ‘unfair foreign taxes,’ potentially leading to canada being designated a ‘bad country’. this designation could result in increased u.s. withholding tax rates of up to 30% on canadian investments, impacting pension plans and cross-border investments in semiconductor giants like nvidia and tsmc. kim moody warns of serious disruption if canada fails to address these concerns.

potential investment decline

Experts anticipate that trump’s tax bill could diminish investment appeal in canada’s semiconductor sector [5]. an analyst at techinsights noted that the proposed tax changes could make canada a less attractive destination for investment [5]. this shift in investment strategy arises from concerns that the current incentives in canada may be undermined by the new tax legislation [5]. companies are reassessing their financial strategies in anticipation of these potential tax adjustments, reflecting a cautious approach to future investments in the canadian market [5].

wall street’s apprehension

wall street is exhibiting growing unease over section 899, a component of trump’s tax bill [4]. this obscure tax measure has triggered alarms due to its potential impact on individuals and companies from countries with tax policies deemed ‘discriminatory’ by the u.s. [4]. the legislation could lead to increased tax rates on passive income, such as interest and dividends, affecting investors holding substantial american assets [4]. the financial community is closely monitoring these developments, recognizing the broad implications for international investment strategies [4].

musk’s disapproval and trump’s response

elon musk has voiced his discontent with trump’s ‘big, beautiful bill,’ diverging from his previous support [3]. musk expressed disappointment over the massive spending bill, which he believes contradicts efforts to reduce government spending [3]. in response, trump defended his agenda by highlighting the political intricacies involved [7]. he emphasized the tax cuts included in the legislation, acknowledging that while he is not entirely satisfied with all aspects, he is enthusiastic about others [7]. trump also refuted claims of retreating on tariff issues, asserting his approach as a negotiation tactic [7].

tariff tactics and economic impact

trump defended his strategy of setting high tariff rates, citing his approach as a negotiation technique [7]. he highlighted raising tariffs on chinese goods to 145% before reducing them to 30% during negotiations, claiming this led to $14 trillion in new investments for the u.s. [7]. however, the associated press reported that this figure appears inflated and lacks substantial verification in economic data [7]. trump also addressed concerns about tariffs on european goods, stating that without the threat of a 50% tariff, negotiations would not have progressed [7].

Bronnen

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