US-Canada trade talks resume after Ottawa drops tech tax
Trade negotiations between the United States and Canada resumed on Sunday after Ottawa withdrew its plan to impose a digital services tax on American technology companies, Canadian Prime Minister Mark Carney announced.
The move follows a statement on Friday by the US President Donald Trump, who had suspended the talks in response to Canada's intention to proceed with the tax. Trump described the measure, which was scheduled to take effect Monday, as a 'direct and blatant attack on our country.'
The proposed levy would have imposed a 3% tax on revenue generated by US digital firms—including Amazon, Google, and Meta—from Canadian users, and applied retroactively. According to estimates, US firms would have faced a $2 billion bill by the end of the month.
Both leaders reportedly held a phone conversation on Sunday. Carney's office confirmed that they agreed to resume negotiations. In a statement, the Canadian government said that 'in anticipation' of reaching a trade agreement, Canada would rescind the tax plan.
'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.
The resumption of talks comes amid broader tensions in US-Canada relations since Trump's return to office in January. The US president has taken an unpredictable approach to trade, including repeated suggestions that Canada could be integrated as a US state.
Trump and Carney last met in May at the White House, and again earlier this month during the G7 summit in Alberta, where both countries agreed to a 30-day deadline for trade negotiations.
Canadian Finance Minister François-Philippe Champagne also spoke on Sunday with US Treasury Secretary Scott Bessent. 'Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress,' Champagne said.
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