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yesterday

Canada Drops Digital Services Tax as U.S. Trade Talks Resume

Prime Minister Mark Carney reversed the 3% levy to clear the way for renewed negotiations with the U.S. aiming at a July 21 agreement

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President Donald Trump during a press conference at the White House on Friday.

Overview

  • Ottawa officially repealed its planned 3% digital services tax on major tech firms, nullifying charges that were set to apply retroactively to 2022.
  • President Trump halted negotiations last Friday after branding the levy a “direct and blatant attack” on U.S. companies and warning of fresh tariffs.
  • Both governments have agreed to resume talks with the goal of finalizing a comprehensive trade and security deal by July 21, 2025.
  • They face a July 9 deadline to strike deals or risk U.S. tariffs reverting to rates as high as 50% on key imports.
  • The episode underscores President Trump’s broader tactic of using tariffs as leverage to secure concessions on defense spending, technology regulation and other policy objectives.