Overview

• Canada formally withdrew its 3% digital services tax hours before the first payments were due, yielding to President Trump’s threat of Section 301 tariffs.
• The repeal immediately revived US-Canada trade negotiations, with negotiators targeting a comprehensive agreement by July 21.
• Major tech companies and industry groups hailed the rescission as a victory for US firms facing projected costs of about US$2 billion.
• The administration plans to press the European Union and other countries to repeal their own digital taxes ahead of a July 9 deadline for reciprocal tariffs.
• Analysts say the move highlights Washington’s reliance on tariff leverage to protect its technology sector and could shape global digital-tax policies.