Nearshore News: Canada Drops Tech Tax, Tariff Talks Intensify, and Brands Warn of Price Hikes

As trade deadlines draw near, tensions ease in some areas and escalate in others. Canada has agreed to drop its digital services tax, clearing the way for a renewed trade deal with the U.S. by July 21. Meanwhile, U.S. trade negotiations with key global partners are heating up ahead of a July 9 tariff deadline. At the same time, the dollar is under pressure—posting its worst first-half decline in over 50 years—and major brands like Nike and Walmart are warning of price increases as tariffs ripple through supply chains.

Nearshore News Summary:

• Canada has agreed to drop its digital services tax on major U.S. tech companies, clearing the way for a renewed trade deal by 21 July. (BBC)
• With a July 9 deadline looming, U.S. trade talks with over a dozen countries are intensifying. (Reuters)
• The U.S. dollar has seen its steepest first-half decline since 1973, dropping over 10%. (NYT)
• Major U.S. and international brands (including Nike, Walmart, Ford, and H&M) are warning or already implementing price increases in response to tariffs. (Business Insider)

Canada drops tech tax to restart US trade talks

Published: June 30, 2025
Source: BBC

Canada has agreed to drop its controversial digital services tax on major U.S. tech companies in a last-minute decision to revive stalled trade talks with the U.S., looking to avoid potential tariffs and reopening the path to a new trade deal.

Key points:

• Tax Reversal to Restart Talks: Canada will rescind a 3% digital services tax—set to take effect retroactively—just before payments were due, prompting the U.S. to resume trade negotiations.
• U.S. Backlash Threatened Trade: President Trump called the tax an “egregious” move and had threatened to raise tariffs on Canadian imports, calling off trade talks on Friday.
• Retroactive Tax Sparked Tensions: “The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians”, Canada’s finance minister statement said.
• Business & Political Pressure: Canadian businesses feared the tax would increase consumer prices, while U.S. officials and lawmakers warned it jeopardized bilateral trade relations.
• Focus Returns to Trade Deal by July 21: The rollback clears the way for U.S.-Canada trade talks to move forward ahead of the July 21 goal for a new agreement.

Where trade talks stand with major US partners ahead of tariffs-hike deadline

Published: June 30, 2025
Source: Reuters

With a July 9 deadline looming, U.S. trade talks with over a dozen countries are intensifying as nations scramble to avoid a surge in tariffs under President Trump’s policy. While only the U.K. has reached a partial deal so far, other key partners—including the EU, Japan, and India—are still deep in negotiations, facing threats of tariffs up to 50% if no agreement is reached.

Key points:

• EU: The EU is negotiating for sector-specific tariff reductions (e.g., autos, steel, pharmaceuticals) and is open to a flat 10% tariff, but refuses to alter digital regulations.
• Japan: Talks are strained, with Trump targeting rice and auto trade; no deal yet, and a warning letter on tariffs may be imminent.
• India: Talks have stalled over U.S. agricultural access and steel tariffs; Indian negotiators are staying in Washington to try to reach a compromise.
• Indonesia & Thailand: Both are taking proactive steps—easing trade restrictions and offering investment deals—to appease the U.S. ahead of the deadline.
• Britain: The only country to finalize part of a deal so far, slashing tariffs on key goods like cars and aerospace equipment.

The Dollar Has Its Worst Start to a Year Since 1973

Published: June 30, 2025
Source: NYT

The U.S. dollar has seen its steepest first-half decline since 1973, dropping over 10%—despite Trump backing down from extreme tariff threats. The shift reflects global concerns about inflation, government debt, and the long-term impact of aggressive trade policy, including tariffs that have disrupted investment confidence and global supply chains.

Key points:

• Tariff Disruption: Initial optimism about Trump’s re-election gave way to fears over unexpectedly high tariffs, which panicked markets and dampened confidence in the U.S. economy.
• Exports vs. Imports: A weaker dollar traditionally helps U.S. exporters by making goods cheaper abroad, but uncertainty around tariffs and trade policy has disrupted these typical benefits.
• Global Investment Shift: The falling dollar is pushing U.S. investors to explore overseas markets, where returns now look stronger after conversion.
• Weakened Safe Haven: Traditionally a refuge during uncertainty, the dollar isn’t consistently playing that role anymore amid global volatility.
• Eroding Confidence: Investors are uneasy about inflation, rising debt, and uncertainty around U.S. policies, weakening faith in the dollar’s global role.
  

Nike, Walmart, Shein, and other major brands that say Trump’s tariffs are pushing them to raise prices

Published: June 27, 2025
Source: Business Insider

Major U.S. and international brands—including Nike, Walmart, Ford, and H&M—are warning or already implementing price increases in response to President Trump’s new tariffs, citing billions in added costs that can’t be absorbed without impacting consumers.

Key points:

• Nike: Plans “surgical” price increases this fall to offset $1 billion in new tariff costs, though it hasn’t disclosed which products will be affected.
• Walmart: Says the scale of tariff increases is too great to absorb; shoppers may see prices rise across categories as the company passes on some of the cost.
• Shein & Temu: Both announced price hikes starting April 25 due to increased operating costs from new trade rules and the end of the de minimis loophole.
• Ford & Volkswagen: Warn of vehicle price increases, with Ford already notifying dealers of potential price hikes unless relief is granted.
• Best Buy & Target: Expect vendors to raise costs, leading to higher prices on electronics and groceries—especially produce from Mexico and Canada.