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Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland.
Will Trudeau’s digital services tax lead to trade dispute?
After all, US Ambassador David Cohen warned in July that if Canada introduces such a tax, his country would have “no choice but to take retaliatory measures in the trade context, potentially in the digital trade context.” Canadian Finance Minister Chrystia Freeland, no stranger to trade disputes with her American friends, appears determined to proceed.
"It's really a matter of fairness," she said. "There are other countries, our partners, who are today collecting DST. That DST is helping make essential investments in their countries, and it's just not fair for Canadians to be deprived of that revenue."
The Canadian argument is that tech companies collecting billions of dollars of revenue in Canada — like Netflix and Amazon — are able to shelter their profits in low-tax jurisdictions and are not contributing meaningfully to the economy. The Americans, unpersuaded by these arguments, don’t want to see Canada break from an OECD consensus, which is to wait until there is an international tax agreement. Business groups in both countries have asked Canada to hold off to avoid the uncertainty and disruption of a trade dispute.
The new legislation introducing the tax did not include a date, which means the government could implement it when it sees fit. Freeland may be hoping that it gives her leverage in trying to convince her American counterparts to accept the tax without imposing countervailing duties.
59.5 billion: US oil major Exxon Mobil on Wednesday paid $59.5 billion to acquire Pioneer Natural Resources, a major producer of shale oil in West Texas.
Hard Numbers: Exxon bets on shale, Netflix makes an unchill choice, Google floods the zone, digital tax plans advance
25: Netflix is planning to raise subscription prices again, starting with the US and Canada, as soon as the ongoing US actors strike ends. The precise cost increase isn’t known yet, but it comes after Netflix and other ad-free streamers have already raised their fees by 25% over the past year.
800: Is a flood on the way? As the weather gets more and more extreme, the answer is, increasingly, yes — but where and when? Google Maps has an answer for that: a new prediction service called Flood Hub. In the US and Canada, it will cover 800 river areas inhabited by some 12 million people.
32 billion: The OECD this week released a new draft treaty on global digital taxation that could raise as much as $32 billion annually by enabling governments to tax tech companies in the countries where they operate, rather than just where they are headquartered. It’s unclear whether it will be ratified by enough countries’ legislatures to take effect — but Canada is charging ahead unilaterally with its own digital tax, despite threats from US lawmakers.South Korean President Yoon Suk Yeol meets with Netflix co-CEO Ted Sarandos during a news conference in Washington, DC.
“Squid Game” diplomacy
When US President Joe Biden hosts South Korea's President Yoon Suk Yeol at the White House on Wednesday, the two leaders will have a lot to talk about.
Biden hopes to reassure Yoon that America would defend South Korea from a North Korean nuclear attack amid rumblings that Seoul wants its own nukes because it fears the US might not respond fast enough if Kim Jong Un pushes the red button. For his part, Yoon needs something from Biden that he can sell as a win back home, where Yoon's approval rating has tanked following the Pentagon leak that suggested the US was snooping on its ally.
Biden agreeing to ease US export controls on South Korean firms or IRA tax credits for South Korean-made electric vehicles would do the trick. But that's about as likely as Seoul doing what Biden wants: supplying weapons to Ukraine.
So far, what Yoon is getting from his almost week-long state visit is a windfall of investments by US companies in South Korea, starting with $2.5 billion from Netflix. The streaming giant is bullish on America’s appetite for South Korean pop culture, which in recent years has turned the nation into a global soft-power heavyweight.Water is dropped near a fireman as the Fairview Fire burns near Hemet, California.
California scorcher, Gulf states threaten Netflix, potential Putin-Xi meeting
California’s dystopian heatwave
Californians are bracing for mass power outages as the state of 40 million people suffers a record-breaking heatwave with temperatures in the triple digits. With residents cranking up air conditioners, state authorities say energy use statewide is hitting record levels. (The power grid is under added pressure because of the extreme heat, which makes power transmission less efficient.) Meanwhile, California’s independent grid operator called for energy rationing between 4 and 9 pm, advising residents to turn up their thermostats and avoid using energy-intensive equipment like dishwashers and washing machines. Indeed, the heatwave and energy crunch indicate that extreme weather events linked to climate change are pummeling countries in the developing and developed world alike. (With a GDP of $3.4 trillion in 2021, California’s economy is the largest in the US, surpassing countries like India and France.) As several wildfires broke out in Southern California in recent days, Governor Gavin Newsom warned that “we’re heading into the worst part of this heat wave.”
Gulf gulp for Netflix
Several Gulf Arab states have threatened legal action against the US-based streaming giant unless it censors any content there that violates “Islamic and societal values.” The salvo came from a Riyadh-based commission that represents the media interests of the Gulf Cooperation Council. No specific offenses were listed, but the concern is believed to center on programming that includes LGBTQ characters or themes. It’s not clear how big the Middle East market is for Netflix — the company lumps the region together with Africa and Europe in its annual reports. But the real challenge may come closer to home: Netflix recently weathered a backlash from progressives angry about a Dave Chappelle comedy special that was seen to make fun of transgender people. Would caving to Riyadh’s content demands provoke a similar storm? As our Eurasia Group friends noted earlier this year, the culture wars are a constant and usually no-win battle for companies these days.Putin-Xi: From BFFs to "it's complicated"
The Kremlin says Vladimir Putin will meet Xi Jinping next week at a regional security gathering in Uzbekistan. If confirmed, it'll be the first in-person chat between the presidents of Russia and China since early February, when Putin attended the opening of the Beijing Winter Olympics less than three weeks before Russia invaded Ukraine. It'll also be Xi's first trip outside China since early 2020 — a big milestone for the architect of China's zero-COVID policy. The two have a lot to talk about since their last hangout, during which they showed off a bilateral bromance that, it turns out, does have limits. Xi was not happy about the Russian invasion but perhaps hoped the war would be quick and the West wouldn't have time to respond. That clearly did not happen, and the conflict looks more destined for a deep freeze than a negotiated settlement. What's more, China is feeling the heat for being noncommittal about Ukraine at a time that its lagging economy can hardly afford to lose foreign investment dollars. Russia, for its part, needs China to keep buying Russian oil that's off Western markets — albeit it at bargain prices — and remain its most powerful “friend.”
Netflix Creates Its Own Ratings: Media in 60 Seconds
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The 10-year challenge might actually be an attempt to improve facial recognition technology.
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And go deeper on topics like cybersecurity and artificial intelligence at Microsoft Today in Technology.