Trade

House Republicans introduced legislation Thursday to investigate Canada's Online Streaming Act, adding to the U.S. pressure on Ottawa to drop the controversial law amid ongoing trade negotiations.

The bill, introduced by Rep. Lloyd Smucker (R-Pa.) and co-sponsored by five other Republicans on the House Ways and Means subcommittee on trade, would direct the U.S. Trade Representative’s Office to launch a Section 301 trade investigation into the new Canadian law, which requires tech companies, mainly from the U.S., to contribute to the creation of Canadian content, including Canadian news. It passed Canada’s Parliament in 2023, but is not in force yet because Canada’s broadcasting regulator hasn’t determined how much money tech companies would have to pay.

The lawmakers want USTR to determine if the law constitutes an unfair trade practice targeting U.S. businesses, a finding that could lay the groundwork to impose higher tariffs on Canada.

“Digital trade plays a critical role in America’s economy, supporting high-paying jobs and exporting American values,” Smucker said in a written statement. “Canada’s unfair policies stack the deck against U.S. companies, creators, and workers. This bill would protect American creators and companies while permitting mutually beneficial competition and innovation.”

Context: U.S. officials have objected to the Canadian legislation as discriminatory and have raised the issue as part of trade negotiations between the two countries over the past year, according to two people familiar with the Canada-U.S. trade talks, who were granted anonymity because they weren’t authorized to discuss the matter.

It’s one of a number of flash points over digital trade that has arisen between the two North American neighbors. Last June, President Donald Trump threatened to terminate all trade discussions with Canada unless it eliminated its digital service tax, and Canadian Prime Minister Mark Carney ultimately gave in to the demand.

What’s next: Republicans in Congress have largely delegated trade powers to Trump, and while the bill could gain GOP support in the House, it would likely stall out in the Senate, where Democrats have more power to block legislation.

The Trump administration, however, is now focused on using Section 301 investigations as a way to reconstruct some of the tariffs struck down by the Supreme Court last month. USTR has already launched two investigations, including on forced labor and supply chains that targets Canada and 59 other countries. And it has suggested that more investigations could be launched in the coming weeks, including a potential probe into digital trade rules.

Mickey Djuric contributed to this report.