Canada to remove Digital Services Tax to Restart Trade Talks with US

The Canadian Government declared on Sunday that it will be stepping back from charging a digital services tax (a form of taxing online companies). This is seen as an effort from Canada to resume the trade negotiations with the USA.

“To support those negotiations, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States,” the statement said.

The negotiations are set to resume by 21st July, 2025.

The US President Donald Trump had called the tax “a direct and blatant attack on our country” and had cancelled the talks between the two nations on Friday.

Canada is the largest importer of US goods and had imported goods worth 349 billion dollars last year. Meanwhile, it shipped goods worth 413 billion dollars to the US in the previous year, according to the data from the Department of Commerce.

Despite being a major trading partner with the US, President Trump has threatened Canada with imposing a tariff of at least 25% on all Canadian goods.

Additionally, Trump has given July 9, 2025, as a deadline to a number of countries to avoid reciprocal tariffs and negotiate deals with the US.