The move comes as Washington pressures multiple trade partners including the EU to ease digital rules targeting American tech firms.
Canada will rescind a planned digital services tax in order to advance stalled trade talks with the U.S., Ottawa announced on Sunday.
The tax on the revenues produced by Canadian online users, which was due to go into effect on Monday, angered Donald Trump, with the American president calling it “a direct and blatant attack” on the U.S. Trump terminated trade talks with Canada on Friday, blaming the “egregious” tax.
Referring to Canada, Trump wrote on Truth Social on Friday: “They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also.”
After his government folded on the tax, Canadian Prime Minister Mark Carney and the Trump administration agreed to resume trade talks, aiming to reach a deal by July 21, according to Canada’s Department of Finance.
Trump has repeatedly railed against “non-tariff barriers” imposed by other countries particularly regulations and taxes on the tech industry.
Britain’s digital services tax caught Trump’s attention, though Britain’s trade secretary told POLITICO last week that reducing it is not part of ongoing U.S.-U.K. trade talks.
Credit: POLITICO