France and the United Kingdom also promised to impose taxes targeting tech giants like Apple and Facebook a day after the U.S. pulled out of OECD negotiations on the talks. (Financial Times)

Talking point: Both sides are ratcheting up the rhetoric. French Finance Minister Bruno Le Maire called the U.S. decision a “provocation,” and said his country would pursue a tax on large tech firms “whatever happens,” while Spain said it would not permit “any type of threat from another country.” U.S. Trade Representative Robert Lighthizer said, “The other people getting together and deciding they’re going to take action against the United States without our acquiescence is something that’s not acceptable.” The breakdown in talks bodes ill for the nascent U.S.-EU trade deal, which many now see as very unlikely to be reached prior to the November U.S. election. The breakdown in OECD talks, which include 140 nations, also has global implications. The U.S. launched trade investigations, which can be a precursor to sanctions, into taxes from India and Brazil earlier this month. The federal Liberals, who campaigned on imposing a digital tax and have been involved in the OECD negotiations, have so far avoided a trade investigation from the U.S. Asked if Canada intends to go ahead with a digital services tax without U.S. participation, Maéva Proteau, Finance Minister Bill Morneau’s press secretary, said, “Our government prefers to take an approach grounded in multilateralism. Canada will continue work with its international partners on the issue of digital taxation.”