Canada Resumes Trade Talks with U.S. After Scrapping Tech Companies Tax
Canada restarted trade negotiations with the U.S. after Prime Minister Mark Carney dropped a proposed digital tax on major American tech companies. The decision followed President Trump’s suspension of talks in response to the tax.
US President Donald Trump (R) and Canadian Prime Minister Mark Carney (L) meet in the Oval Office. (Archive). Photo: EFE
June 30, 2025 Hour: 12:53 am
Canadian Prime Minister Mark Carney announced on Sunday that his country has resumed trade negotiations with the United States after reversing its decision to impose a new digital tax on major American tech companies. This policy shift comes after U.S. President Donald Trump broke off talks on Friday in response to the proposed tax.
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Carney emphasized that, throughout negotiations for a new economic and security partnership with the U.S. the Canadian government’s main priority will be ensuring that any potential agreement delivers clear benefits for Canadian workers and businesses.
Canada’s Finance Department also issued a statement confirming that it will withdraw the Digital Services Tax (DST) in anticipation of reaching a “mutually beneficial” trade agreement with the U.S.
Just last week, Canada’s Finance Minister François-Philippe Champagne had warned that the digital tax was still in effect and that the first payment—targeting large U.S. multinationals like Meta—was due on Monday, June 30. However, Trump abruptly ended trade talks with Canada on Friday after criticizing the tax, which would have been applied retroactively to revenues earned since 2022.
The Canadian government recalled that it originally announced the DST in 2020 to address the fact that many large technology companies operating in Canada were not paying corporate taxes on profits earned from Canadian consumers. Although Canada’s preference has always been a multilateral solution on digital taxation, it will now repeal the law that created the DST.
Since his return to the White House, Trump has pushed for new tariffs against U.S. trade partners under the USMCA (United States-Mexico-Canada Agreement), citing reasons like trade imbalances, drug trafficking (such as fentanyl), and migration flows.
Following the political shift in Canada, Carney—who took office on March 14—announced in April that there would be negotiations for a new trade and security agreement between Canada and the United States.
Author: VMMH
Source: EFE
