Trade talks with US resume after Canada rescinded tech tax: Carney
TORONTO, June 30, (AP): Canadian Prime Minister Mark Carney said late Sunday trade talks with US have resumed after Canada rescinded its plan to tax US technology firms. US President Donald Trump said Friday that he was suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called "a direct and blatant attack on our country.'
The Canadian government said "in anticipation' of a trade deal "Canada would rescind' the Digital Serves Tax. The tax was set to go into effect Monday. Carney and Trump spoke on the phone Sunday, and Carney's office said they agreed to resume negotiations. "Today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month's G7 Leaders' Summit in Kananaskis,' Carney said in a statement.
Carney visited Trump in May at the White House, where he was polite but firm. Trump traveled to Canada for the G7 summit in Alberta, where Carney said that Canada and the US had set a 30-day deadline for trade talks. Trump, in a post on his social media network last Friday, said Canada had informed the US that it was sticking to its plan to impose the digital services tax, which applies to Canadian and foreign businesses that engage with online users in Canada.
The digital services tax was due to hit companies including Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It would have applied retroactively, leaving US companies with a $2 billion US bill due at the end of the month. Daniel Béland, a political science professor at McGill University in Montreal, called Carney's retreat a "clear victory" for Trump.
"At some point this move might have become necessary in the context of Canada-US trade negotiations themselves but Prime Minister Carney acted now to appease President Trump and have him agree to simply resume these negotiations, which is a clear victory for both the White House and big tech," Béland said. He said it makes Carney look vulnerable to President Trump's outbursts. "President Trump forced PM Carney to do exactly what big tech wanted. US tech executive will be very happy with this outcome,' Béland said.
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