Canada rescinds digital services tax to advance stalled trade talks with President Trump

President Donald Trump holds a signed executive order on tariffs, in the Rose Garden at the White House in Washington, D.C., April 2, 2025. Photo by Leah Millis/Reuters
Canada canceled its digital services tax aimed at American tech companies just hours before its scheduled start on Monday, aiming to restart stalled trade talks with U.S. President Donald Trump.
President Trump and Canadian Prime Minister Mark Carney will restart negotiations to reach a trade agreement by July 21, according to a Sunday statement from Canada’s finance ministry.
Reuters:
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Trump abruptly called off trade talks on Friday over Canada’s digital services tax, saying it was a “blatant attack.”
He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push U.S.-Canada relations back into chaos after a period of relative calm.
Canada’s planned digital tax was 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022.
It would have impacted U.S. technology firms, including Amazon.com, Meta, Alphabet’s Google, and Apple.
The tax collection slated for Monday will be halted, the statement from Canada’s finance ministry said. Finance Minister Francois-Philippe Champagne will bring forward legislation to rescind the Digital Services Tax Act.
“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” U.S. Commerce Secretary Howard Lutnick responded in a post on X.

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MacDailyNews Take: Well, that didn’t take long.
“Canada is now forced to rethink its program of theft from American companies.” – MacDailyNews, June 27, 2025
See also: President Trump ends trade talks with Canada, threatens to set tariff over digital services tax – June 27, 2025

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