Canada announced on Sunday, June 29, 2025, that it has eliminated its digital services tax, which specifically targeted U.S. technology companies. This decision aims to restart trade negotiations with the United States, just days after U.S. President Donald Trump had halted them.
Canadian Prime Minister Mark Carney and President Trump are set to resume trade talks, with a deadline of July 21, 2025, to reach an agreement. Trump had previously cut off negotiations on Friday, June 27, 2025, labeling Canada’s tax a “blatant attack” and threatening new tariffs on Canadian goods within the next week.
The now-rescinded tax amounted to 3% of digital services revenue earned from Canadian users, applying to annual revenue exceeding $20 million, with payments retroactive to 2022. Canada holds significant economic importance to the U.S., being its second-largest trading partner and the biggest buyer of American exports. Last year, Canada imported $349.4 billion in U.S. goods and exported $412.7 billion to the U.S.
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