Canada Rescinds Digital Services Tax to Resume U.S. Trade Talks

Canada has decided to rescind its Digital Services Tax (DST) targeting U.S. technology companies to resume trade negotiations with the United States, aiming for a comprehensive agreement by July 21, 2025. The DST, introduced in 2020, imposed a 3% levy on revenues above $20 million from digital services operating in Canada, affecting major U.S. firms like Amazon, Google, Meta, Uber, and Airbnb. The tax had led President Donald Trump to suspend trade discussions and threaten tariffs on Canadian exports, citing the levy as a 'direct and blatant attack.' Canadian Finance Minister François-Philippe Champagne announced that the June 30 collection of the DST will be halted and legislation to repeal the tax will be introduced soon. Prime Minister Mark Carney emphasized that the government remains committed to supporting Canadian workers and businesses while seeking a mutually beneficial trade deal with the U.S. This move reflects Canada's economic dependence on the United States and a strategic effort to avoid further trade disruptions.