Canada rescinds digital services tax after Trump suspends trade talks

by | Jun 29, 2025 | World

Canada’s prime minister says trade talks with US will resume with decision to drop new levy.Canada has rescinded its digital services tax in a bid to advance trade negotiations with the United States, days after US President Donald Trump called off talks in retaliation for the levy.
Canadian Prime Minister Mark Carney, in a statement on Sunday, said he and Trump have now agreed to resume trade 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.
The Canadian levy on technology firms had been set to go into effect on Monday.
Trump said on Friday that the tax, targeting “our American Technology Companies”, was “a direct and blatant attack on our Country”.
The US is home to some of the world’s biggest technology companies, including Apple, Alphabet/Google, Amazon and Meta.
Canadian tech journalist Paris Marx told Al Jazeera that Carney’s decision to drop the levy shows Trump that “Canada can be pushed around”.
“Multinational tech companies do not pay their fair share of tax in Canada and the digital services tax is designed to address that,” said Marx, who hosts the Tech Won’t Save Us podcast.
“It has been continually delayed for years in the hope that a diplomatic process in the OECD would create an international framework to ensure those companies pay more tax in countries around the world. But the United States, under [former US President Joe] Biden and Trump, has ensured it’s been unable to move forward,” he said.
“More countries are enacting digita …

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