Canada announced Sunday that it will rescind its digital services tax in an effort to move forward with broader trade negotiations with the United States. The decision comes just days after President Trump sharply criticized the tax on U.S. tech companies and declared an end to trade talks with Canadian officials, threatening to impose new tariffs on Canadian goods within a week.
According to a statement from Canada’s Department of Finance, Trump and Canadian Prime Minister Mark Carney have now agreed to resume trade negotiations, with the goal of reaching a deal by July 21. As part of the move, payments related to Canada’s Digital Services Tax which were originally due on Monday will be halted. Finance Minister François-Philippe Champagne is expected to introduce legislation soon to officially repeal the Digital Services Tax Act.
Carney said in a statement that Canada’s approach to talks with the U.S. would be based on the long-term benefit to Canadian workers and businesses. “In our negotiations on a new economic and security relationship between Canada and the United States, 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,” he said.
Earlier in the day, Trump told Sunday Morning Futures on Fox News that the U.S. would not re-enter trade talks with Canada until “certain taxes” were removed.
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