US-Canada Trade Talks Resume as Canada Drops Digital Services Tax on US Tech Firms
Trade negotiations between the United States and Canada have resumed after Canadian Prime Minister Mark Carney announced on Monday that his government would rescind its planned Digital Services Tax (DST) targeting American technology companies. The move comes just days after U.S. President Donald Trump suspended bilateral trade talks over Canada’s intention to go forward with the tax, which he described as “a direct and blatant attack on our country.”
The Digital Services Tax, which was scheduled to take effect on Monday, would have applied to both domestic and foreign businesses operating digital platforms in Canada. It was aimed at major tech firms generating revenue from online user engagement, many of which are U.S.-based. Trump’s administration reacted swiftly, halting all trade discussions and demanding the removal of what it saw as an unfair policy targeting American interests.
However, in a significant policy reversal, Ottawa confirmed that it has scrapped the tax in order to pave the way for a broader trade agreement. “Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States,” a government statement said, as reported by the Associated Press. The announcement also noted that both sides aim to reach an agreement by July 21, 2025.
Canadian Finance Minister Francois-Philippe Champagne expressed optimism about future negotiations, stating that the government anticipates a trade deal that benefits both countries. “We look forward to a renewed partnership that ensures fairness and growth for industries on both sides of the border,” he said.
The earlier proposal to implement the DST had drawn criticism from U.S. lawmakers and tech industry leaders, who argued that it disproportionately targeted American firms like Google, Amazon, and Meta. Its withdrawal is now being seen as a key gesture to defuse tensions and realign trade priorities.
As talks resume, both Washington and Ottawa appear committed to resolving their differences and forging a more collaborative economic framework in the months ahead.
