Canadian Leader Says Trade Talks With U.S. Resume After Canada Rescinded Tech Tax

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After Canada withdrew its plan to impose taxes on American tech companies, the Canadian Prime Minister, Mark Carney, announced on Sunday that negotiations regarding trade with the United States have been reinstated.

On Friday, U.S. President Donald Trump announced a halt in trade negotiations with Canada due to their intent to maintain a levy on tech companies, which he described as a “bold and obvious assault” on the United States.

In preparation for a potential trade agreement, the Canadian government has announced that they will withdraw the Digital Services Tax if it goes ahead as planned on Monday.

Trump and Carney had a phone conversation on Sunday, and according to Carney’s office, they decided to reinitiate their talks.

Carney stated that today’s declaration is intended to facilitate the continuation of talks, aiming for the deadline established on July 21, 2025, as agreed upon at this month’s G7 Leaders’ Summit in Kananaskis.

In May, Carney paid a visit to Trump at the White House. During their meeting, he was both courteous and resolute. Later on, Trump journeyed to Alberta, Canada for the G7 summit. It was there that Carney declared that Canada and the U.S. had established a 30-day timeline for trade negotiations.

Last Friday, Trump posted on his social media platform stating that Canada notified the US of their intention to carry forward with implementing a digital services tax. This tax affects both domestic and international companies active in Canada’s online market.

The proposed digital services tax was set to impose a 3% fee on the income generated from Canadian customers for tech giants such as Amazon, Google, Facebook (Meta), Uber, and Airbnb. This tax would have been effective retroactively, resulting in a $2 billion USD payment that American companies owed by the end of the month.

Daniel Béland, a political science professor from McGill University in Montreal, deemed Carney’s withdrawal as a “resounding triumph” for Trump. (This version maintains the original meaning but uses more common and conversational language.)

Béland stated that at some point, this action may have been crucial in the context of Canada-US trade talks, but Prime Minister Carney chose to take it prematurely to satisfy President Trump and secure his agreement to reinitiate these discussions. This is undoubtedly a triumph for both the White House and the tech industry.

He said it makes Carney look vulnerable to President Trump’s outbursts.

According to Béland, President Trump pushed Prime Minister Carney into fulfilling the desires of major tech companies. This decision is likely to bring great satisfaction among US tech executives.

On Sunday, Canadian Finance Minister François-Philippe Champagne had a conversation with U.S. Treasury Secretary Janet Yellen.

Cancelling the digital services tax can facilitate the advancement of discussions towards a fresh economic and security partnership with the United States,” stated Canadian Finance Minister François-Philippe Champagne, as per his declaration.

Trump’s declaration on Friday marked another twist in the trade conflict he initiated after assuming office for a second term in January. The progress with Canada has been unpredictable, starting with the U.S. president provoking its northern neighbor and frequently proposing the idea of it becoming a U.S. state.

Canada and the United States are considering relaxing some of the high tariffs that Trump implemented on products imported from their neighboring country.

As an ardent follower, I’ve found myself in a position where I’m explaining that our president has implemented tariffs of 50% on steel and aluminum, and 25% on automobiles. Additionally, there’s a 10% tax being levied on imports from many nations. However, it’s important to note that these rates could potentially increase on July 9, following the expiration of the 90-day negotiating period he established.

Under Donald Trump’s administration, both Canada and Mexico were subjected to tariffs as high as 25%, a move supposedly aimed at halting fentanyl trafficking. However, certain goods continue to enjoy exemptions under the USMCA agreement, which was signed during his initial term in office.

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2025-06-30 10:55