Canada Drops Digital Tax, U.S. Trade Talks Back on Track

The United States is set to resume trade talks with Canada following Ottawa's decision to cancel its digital services tax, which targeted American tech firms, a move praised by U.S. officials as a significant victory. White House economic adviser Kevin Hassett confirmed the development on Monday, emphasizing the impact of President Trump's negotiation strategies.

President Trump had urged Prime Minister Mark Carney to drop the tax at a G7 meeting earlier in June. The tax, slated to begin on Monday, was called off hours before implementation to facilitate smoother trade negotiations. Canadian Finance Minister Francois-Philippe Champagne is expected to draft legislation to repeal the tax.

Stocks surged as markets responded positively to news of resumed negotiations. U.S. Commerce Secretary Howard Lutnick acknowledged the gesture, stating it avoided a deal breaker for trade agreements. Both nations aim to conclude an economic pact by July 21, while U.S. Treasury Secretary Scott Bessent anticipates swift trade deals across various countries by July 9.

(With inputs from agencies.)