Canada scrapped its digital services tax on U.S. technology firms just hours before it was set to take effect Monday, clearing the way for stalled trade negotiations with the United States to resume.
Canadian Prime Minister Mark Carney and President Trump will resume trade talks aiming for a new agreement by July 21, Canada’s finance ministry announced Sunday night, following their pledge at this month’s G7 summit to finalize a deal within 30 days. The ministry also confirmed that tax collection scheduled for Monday would be halted and that Finance Minister François-Philippe Champagne will introduce legislation to repeal the Digital Services Tax Act.
Trump abruptly ended trade talks with Canada on Friday, calling the tax a “blatant attack.” On Sunday, he warned of new tariffs on Canadian goods within the week if the issue was not resolved.
The now-abandoned tax would have imposed a 3% levy on revenue earned from Canadian users by digital firms making more than $20 million annually from such services, retroactive to 2022. Major U.S. tech companies like Amazon, Meta, Google, and Apple would have been affected.
Wall Street futures hit record highs Monday morning, boosted by optimism over progress in U.S. trade talks with Canada and other key partners.
