Canada Rescinds Tech Tax, Resumes Trade Talks with US

Canadian Prime Minister Mark Carney has rescinded a planned digital services tax aimed at U.S. tech companies, a move that was met with strong criticism domestically but welcomed by President Donald Trump, who called off trade talks in response to the tax proposal. The tax would have imposed a 3% levy on revenue from Canadian users, retroactive to 2022, affecting companies such as Amazon, Google, and Meta. After Trump's denunciation of the tax as a "blatant attack" and suspension of negotiations, Canada reversed course to reopen trade discussions, aiming to finalize a deal by July 21, 2025. The decision sparked disappointment among Canadians who had adopted the "elbows up" slogan symbolizing resistance to U.S. pressure, leading some to label the government as inconsistent or weak. Despite the setback, Carney expressed optimism about progressing toward a new economic and security agreement with the U.S. The developments highlight the ongoing volatility in U.S.-Canada relations under Trump’s presidency, with trade tensions and negotiations continuing to fluctuate.