Canada and the United States are set to resume trade talks after Canada scrapped its digital services tax targeting U.S. technology firms late on Sunday, just hours before it was due to take effect.
The trade talks were stalled on an account of these taxes being introduced by the Canadian government. President Trump consequently called off the trade talks, touting it as a ‘blatant attack’ on United States technology firms.
The digital services tax would have impacted U.S. technology firms, including Amazon, Meta, Alphabet’s Google, and Apple, among others.
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.
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.
President Donald Trump signed an executive order early this year, to impose an additional 25% tariff on most non-energy Canadian goods and 10% on Canadian energy exports which took effect in March 2025. The introduction of these tariffs caused a major shake to Canada’s economy and diplomacy.
