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Canada rescinds digital services tax in bid to advance trade talks with US
On June 28, Trump abruptly cut off trade talks with Canada over its tax targeting U.S. technology firms, saying that it was a "blatant attack."
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Reuters - Sun, 29, Jun 2025
- 23:14 EDT
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U.S. President Donald Trump meets with Canadian Prime Minister Mark Carney in the Oval Office at the White House in Washington, D.C., U.S., May 6, 2025. / Reuters/Leah Millis
Canada has rescinded its digital services tax targeting U.S. technology firms in a bid to advance trade negotiations with the U.S., Canada's finance ministry said in a statement on June 29, days after U.S. President Donald Trump called off trade talks.
Canadian Prime Minister Mark Carney and Trump will resume trade negotiations in order to agree on a deal by July 21, 2025, the ministry said.
On June 28, Trump abruptly cut off trade talks with Canada over its tax targeting U.S. technology firms, saying that it was a "blatant attack" and that he would set a new tariff rate on Canadian goods within the next week.
The tax was 3 percent of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments will be retroactive to 2022.
Canada is the second-largest U.S. trading partner after Mexico, and the largest buyer of U.S exports. It bought $349.4 billion of U.S. goods last year and exported $412.7 billion to the U.S., according to U.S. Census Bureau data.
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