Canadian PM Carney Says Trade Talks with U.S. Resume After Tech Tax Withdrawal

Canadian Prime Minister Mark Carney announced Sunday that trade negotiations with the United States have resumed after Ottawa withdrew its planned Digital Services Tax (DST) targeting U.S. tech companies.

The reversal comes just two days after U.S. President Donald Trump halted trade discussions, calling Canada’s proposed tax “a direct and blatant attack on our country.” The DST, which was set to take effect Monday, would have imposed a 3% levy on revenue from Canadian users for major tech firms like Amazon, Google, Meta, Uber, and Airbnb — with retroactive application leading to an estimated $2 billion bill for U.S. companies.

“In anticipation of a trade agreement, Canada will rescind the Digital Services Tax,” the Canadian government said in a statement.

Carney confirmed that he and Trump have agreed to restart negotiations. “Today’s announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” Carney said.

Carney and Trump previously met at the White House in May. Their interactions, though marked by tension, were described as respectful. Trump later traveled to Alberta for the G7 summit, where both leaders agreed to a 30-day deadline for advancing trade talks.

Canadian Finance Minister François-Philippe Champagne welcomed the move, saying, “Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress.”

Trump’s decision to suspend talks last week was part of a broader trade offensive that has seen his administration slap steep tariffs on Canadian imports: 50% on steel and aluminum, 25% on autos, and 10% on imports from most countries. He has also threatened to raise those rates after a 90-day negotiating period that ends July 9.

Additional tariffs of up to 25% targeting Canada and Mexico were imposed under the pretext of combating fentanyl smuggling. However, several products still fall under protections outlined in the 2020 U.S.-Mexico-Canada Agreement (USMCA), signed during Trump’s first term.

The path ahead for Canada-U.S. trade remains uncertain, but the removal of the DST marks a key step toward de-escalation.