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Canada drops tech tax, US trade talks resume: PM Carney
Canadian Prime Minister Mark Carney announced Sunday that trade talks with the United States have resumed after Ottawa withdrew its plan to impose a tax on U.S. technology giants.
U.S. President Donald Trump had suspended negotiations on Friday, calling Canada’s proposed Digital Services Tax “a direct and blatant attack on our country.” The tax, which was scheduled to take effect on Monday, targeted major U.S. firms like Amazon, Google, Meta, Uber, and Airbnb with a 3% levy on revenue generated from Canadian users, including retroactive payments amounting to roughly $2 billion.
However, the Canadian government said it would withdraw the tax “in anticipation” of a broader trade agreement with the United States.
“This decision will allow negotiations to get back on track toward the July 21, 2025, timeline agreed at this month’s G7 Leaders' Summit in Kananaskis,” Carney said in a statement.
Carney had previously visited Trump at the White House in May, holding what was described as a firm but polite meeting. Trump later traveled to Canada for the G7 summit in Alberta, where both leaders set a 30-day deadline to reach a new trade understanding.
Tensions escalated last Friday when Trump, in a post on his social media platform, accused Canada of sticking to its digital tax plan, prompting him to pause trade talks.
Canadian Finance Minister François-Philippe Champagne said rescinding the tax would clear the way for meaningful progress in reshaping the two countries’ economic and security ties.
Trump’s move was the latest twist in the trade dispute with Canada, part of a broader series of economic measures he has rolled out since beginning his second term in January.
Relations between Washington and Ottawa have been strained, with Trump imposing heavy tariffs, including 50% on steel and aluminum, 25% on automobiles, and a 10% tax on most imports, with potential increases looming after July 9—the end of the 90-day negotiating window.
Canada and Mexico are also dealing with separate tariffs of up to 25% imposed under the Trump administration’s stated goal of curbing fentanyl trafficking, though some trade protections remain under the U.S.-Mexico-Canada Agreement signed during Trump’s first term, reports UNB.