Canada's U-Turn on Digital Tax: Trade Talks Back on Track
Just hours before implementing its digital services tax on U.S. tech firms, Canada withdrew the levy to revive stalled trade negotiations. This move follows U.S. President Trump's abrupt cancellation of talks. The tax was a 3% revenue charge aimed at major firms like Amazon and Google. Stocks rose on the news.
Late on Sunday, Canada unexpectedly repealed its digital services tax targeting U.S. technology giants, just hours before its scheduled implementation. This decision appears to be a strategic move to reinitiate halting trade talks with the United States.
Prime Minister Mark Carney and U.S. President Donald Trump are set to return to negotiations, aiming for an agreement by July 21, as confirmed by Canada's finance ministry. Trump had previously canceled discussions on Friday, criticizing the tax as an overt aggression.
The planned tax would have imposed a 3% tariff on digital service revenues exceeding $20 million annually from Canadian users, impacting major firms such as Amazon, Google, and Apple. The sudden move has boosted stock index futures, while Canadian officials gear up to repeal the Digital Services Tax Act formally.
(With inputs from agencies.)
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