Canada has dropped its digital services tax to ‘advance broader trade negotiations’ with the United States. The announcement came hours after Fox News aired an interview with U.S. President Donald Trump, who said talks were off until Canada drops ‘certain taxes’.

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Canada has announced it will no longer implement its digital services tax, which was set to target major technology companies such as Meta, Google, and Amazon. The decision comes after US President Donald Trump reiterated that trade negotiations would not continue unless Canada dropped the tax.

The Canadian government stated that rescinding the tax is intended to advance broader trade negotiations with the United States. Both Prime Minister Mark Carney and President Trump have agreed to resume discussions with the aim of reaching a trade agreement. The tax, which would have imposed a 3% levy on digital services revenues retroactive to 2022, was expected to generate significant revenue from American firms but will now be withdrawn as part of efforts to secure a new trade deal.

Canada drops digital services tax after Trump repeats trade threats

There is a major development tonight in Canada-U.S. trade talks. Late this evening the federal government suddenly announcing it is now rescinding its tax targeting big tech companies. The prime minister is saying talks can now resume. This comes just two days after Trump abruptly posted online that trade talks were off unless Canada dropped the digital services tax. It was just hours away from taking effect tonight when Ottawa made the announcement. Sam Samson is in Washington and Sam take us through this late news from the federal government. So this statement it says the finance minister announced he is rescinding the tax in anticipation of a mutually beneficial comprehensive trade agreement with the United States. The statement goes on to say Ian that both Prime Minister Mark Carney and U.S. President Donald Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21st this year. So it's plausible to suggest there were ongoing conversations about this through the weekend right up to the last hour because the tax was supposed to come into effect tomorrow. But now Canada will not collect this levy and the finance minister will bring forward legislation to rescind the digital services tax. Carney also said earlier this month remember that he and Trump would work to make a trade agreement happen within 30 days. Well in the statement the prime minister says this announcement supports a resumption of negotiations. And this tax has been in talks for years going back to the Trudeau government. Sunday's statement uses the phrase Canada's new government a few times. Something the prime minister has been doing a lot lately and perhaps signaling that the decisions of the past liberal government are ones Mark Carney is willing to revisit to make a trade deal with Trump. And just how intense was the pressure Sam to lift this tax? I mean it seemed very heavy. Trump straight up said he wouldn't talk anymore about trade with Canada because of this tax. He said it on Friday in a Truth Social post and he reiterated it again on Fox News Sunday. You said you're stopping all trade discussions with Canada? Until such time as they drop certain taxes, yeah. Canada is a very tough country to deal with, I will say that. But you said I love Canada. You have USMCA in place. I know but You'll have to do it. But USMCA is no good if they cheat. This tax was aimed at global tech giants that made at least 20 million dollars off of selling digital services to Canadians. So think Meta, Google, Amazon. It was a 3% levy and it was retroactive back to 2022. So the first payment would have seen roughly 2.7 billion Canadian dollars from American companies alone. But now it looks like that won't happen and trade talks may resume with the president of the United States. Sam Sampson reporting tonight from Washington.

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Canada drops digital services tax after Trump repeats trade threats

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