Canadian Prime Minister Mark Carney said trade talks with the United States have resumed in hopes of reaching a deal by July 21, after Canada rescinded its plan to tax US technology firms.
The government said Canada would rescind the Digital Services Tax (DST), which was scheduled to go into effect on Monday, in anticipation of a mutually beneficial comprehensive trade arrangement with the United States. It also said Trump and Carney have agreed that 鈥減arties will resume negotiations with a view towards agreeing on a deal by July 21, 2025.鈥
Trump had earlier pulled out of trade negotiations with Canada, citing Canada鈥檚 Digital Services Tax and adding that Ottawa will learn of their tariff rate within a week. He called Canada a 鈥渄ifficult country to deal with鈥.
鈥淲e have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,鈥 he said in a Truth Social post.
鈥淭hey are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.鈥
There was no immediate comment from the White House or Trump on the matter.
The digital services tax was enacted last year and was predicted to bring in Canadian $5.9 billion ($4.2 billion) over five years. The three per cent tax applies to large or multinational companies such as Alphabet, Amazon and Meta that provide digital services to Canadians, and Washington had previously requested dispute settlement talks over the matter.
The tax applies retroactively to revenue earned since January 1, 2022, with the first payment due by June 30, 2025. It covers four categories: online marketplace services, online ads, social media services, and the sale or licensing of Canadian user data.
(with agency inputs)