Canada has officially scrapped its controversial 3% Digital Services Tax after former U.S. President Donald Trump halted all trade talks and threatened new tariffs. The tax, set to target tech giants like Amazon, Google, and Meta, faced intense U.S. backlash. Finance Minister Champagne said rescinding the tax is essential to reviving stalled negotiations. Ottawa had previously vowed not to yield, but with over 80% of Canadian exports reliant on the U.S., the rollback clears the way for renewed talks ahead of a July 21, 2025 deadline.
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Explained! Why President Trump abruptly ended all trade talks with Canada. Trump called Canada's Digital Services Tax a “direct & blatant attack” on U.S. firms. The tax, retroactive to 2022, targets tech giants like Amazon, Meta, and Google, sparking fierce backlash. Trump also threatened new tariffs on Canadian exports, reigniting major trade tensions. With over 80% of Canadian exports headed to the U.S., the move could disrupt industries and escalate economic strain on both sides of the border.
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