The rationale behind a government policy initiative is usually pretty obvious: electoral politics. The Prime Minister, or a member of cabinet, or the governing party itself, believes it will help win re-election. If it contributes to the common good, all the better.But Ottawa's unilateral determination to tax US companies into bending the knee defies sensible explanation.The international community continues to negotiate a solution to the challenges of taxation that have arisen from the digital economy, with a majority of nations participating in good faith to finalize this. This effort is intended to avoid discriminatory digital services taxes (DSTs) from continuing to emerge around the world. At the latest meeting, in recognition that a multilateral decision will be better for the global tax and trade community, 138 countries under the aegis of the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing signed on to a one-year moratorium on DSTs. Canada, and four other countries not known for their international cooperation - Russia, Belarus, Sri Lanka, and Pakistan - did not.Instead, Finance Minister Chrystia Freeland announced that Canada would move forward with a three-percent digital services tax (DST) on multinational companies – which, while headquartered in the United States, have made significant investments in Canada—by January 2024. And for good measure, she said the Canadian government intends to make it retroactive to the beginning of 2022.Where this tax is concerned, Canada is casting itself as an outcast, turning away from the multilateral approach taken by most of the world's nations.Further, this proposal comes with a significant risk. The U.S. government, including top officials in the Biden administration and the U.S. Congress, have made very clear that they will retaliate if Canada moves forward with a discriminatory tax. All signs point to this being a serious and legitimate threat. The Canadian American Business Council has publicly and privately warned Canadian officials as well.Canada's most recent DST proposal looks remarkably similar to the French DST, which the U.S. Trade Representative ruled was a “discriminatory” tax and subject to Section 301 trade tariffs. If that's not enough, the proposal also runs afoul of the Canada-US-Mexico Free Trade Agreement.  The “approach with caution” signs don't stop here. Last year, the US Senate Finance Committee urged the USTR to act should Canada enact a DST, and in May, Ways and Means Chairman Jason Smith introduced the Defending American Jobs and Investment Act, which retaliates against countries that have and/or enact a DST.As two Washington insiders, we the authors have no doubt American trade officials are considering measures intended to exact maximum effect in Canada (just as Canada's retaliatory tariffs in response to former president Donald Trump's trade barriers against Canadian steel and aluminium were carefully formulated to seize and leverage the attention of Republican lawmakers).We at the CABC were vocal opponents of Trump's steel and aluminum tariffs, just as we are opposed to the Canadian targeting of U.S. technology companies. Experience tells us that U.S. trade retaliation would effectively reduce the tax gains and intended wealth transfer of the DST to nil. And with a review of the new Canada-US Free Trade Agreement in the offing, not to mention the most contentious presidential election in American history, does it really make sense to provoke the U.S. on this?As Canadian academic Michael Geist has explained, the proposed DST is massively complicated, prone to uneven application, and will very likely ensnare Canadian companies along with the US companies Freeland wants to dun. Unintended consequences, in other words, which good public policy strives to avoid. And all of this for a tax the Parliamentary Budget Office reckons will generate less than $1 billion in annual revenue. How that defends Canada's national interest is incomprehensible.Digital companies are transnational. Their reach ignores national borders. Which is why 138 nations have decided to observe a one-year moratorium on imposing unilateral taxes on digital services.They want to act together.The multilateral approach is the sensible approach. Charging out ahead of the pack, swinging away and irrespective to consequences, is not.Maryscott Greenwood is the CEO of the Canadian American Business Council and a frequent commentator on Canada-US relations.  Elizabeth Burke is the Director of U.S. Advocacy for the Council after having served as a senior official for more than 10 years in the U.S. Senate.