Canada has rescinded its digital services tax in a bid to advance trade negotiations with the U.S., the country’s finance ministry announced June 29, days after Donald Trump ended trade talks amid a dispute over the tariff.
The Guardian reports that Canadian prime minister Mark Carney and U.S. president Donald Trump will resume trade negotiations with a view towards agreeing on a deal by July 21, the ministry said in a statement late on June 29.
The U.S. and Canada had been negotiating a trade deal for months, but those negotiations faltered on June 27, after Trump accused Canada of imposing unfair taxes on U.S. technology companies in a “direct and blatant attack on our country.”
He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week.
The tax, which had been announced in 2020, was set to be 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments would have been retroactive to 2022. The first payments were due on June 30 and would have cost U.S. tech companies, including Alphabet, Amazon and Meta, an estimated $3 billion.
“Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” Carney said, adding that the move would “support a resumption of negotiations.”
