Tariffs on physical goods can be enforced during physical movement, e.g. a shipment crossing a border. Cross-border taxation of digital services is more complex

Tariffs on physical goods can be enforced during physical movement, e.g. a shipment crossing a border. Cross-border taxation of digital services is more complex. Canada introduced a unilateral DST (Digital Services Tax) in 2024, which the US is challenging under USMCA, https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/digital-services-tax.html https://www.canada.ca/en/services/taxes/excise-taxes-duties-... This article claims that digital services are not subject to direct US tariffs, https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on-canadian-businesses-what-you-need-to-know https://www.codemastersinc.com/post/impact-of-u-s-tariffs-on... > DIGITAL SERVICES: While traditional industries face direct tariff impacts, digital services are also encountering challenges. Many Canadian tech firms provide software, consulting, and cloud-based solutions to U.S. clients. The uncertainty surrounding trade relations has led some American companies to reconsider long-term contracts with Canadian providers. Additionally, potential retaliatory measures from Canada could further complicate cross-border data exchange and intellectual property regulations. Despite these concerns, digital businesses may still have an advantage due to their ability to operate remotely and pivot towards new markets with relative ease.