Canada rescinds digital services tax to advance stalled US trade talks

30/6/2025 12:56

Canada scrapped its digital services tax targeting U.S. technology firms late on Sunday, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States.



Canada's finance ministry said in a statement, Canadian Prime Minister Mark Carney and U.S. President Donald Trump will resume trade negotiations in order to agree on a deal by July 21.



Trump abruptly called off trade talks on Friday over the tax targeting U.S. technology firms, saying that it was a "blatant attack."



He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push U.S.-Canada relations back into chaos after a period of relative calm.



The breakdown in trade talks comes after the two leaders met at the G7 in mid-June and Carney said they had agreed to wrap up a new economic agreement within 30 days.



Canada's planned digital tax was 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022.



It would have impacted U.S. technology firms, including Amazon, Meta, Alphabet's Google and Apple, among others.