Canada's Digital Tax U-Turn Unblocks U.S. Trade Talks
Canada has scrapped its digital services tax on U.S. technology firms at the last moment, aiming to revive trade talks with the U.S. The tax, set to impact major firms like Amazon and Google, was halted to avoid escalating tensions. Stocks responded positively to this development.
In a dramatic turnaround, Canada has decided to retract its contentious digital services tax that was aimed at U.S. technology giants mere hours before its implementation. This decision is seen as a strategic move to reignite stalled trade negotiations with the United States.
The halt closely follows U.S. President Donald Trump's abrupt decision to suspend talks, labeling the tax a 'blatant attack' on American corporations. Talks are set to resume, with key discussions slotted before the July 21 deadline, according to statements from Canada's finance ministry.
The initial announcement of the tax caused notable tremors in financial markets, yet the retraction has reversed this sentiment, driving up stock index futures and boosting Asian markets. The decision underscores the critical trade partnership between Canada and the U.S., as both nations navigate complex economic tensions.
(With inputs from agencies.)
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