Canada Withdraws Digital Services Tax Amid Trade Negotiations with the U.S.

On Sunday, Canada announced the withdrawal of its Digital Services Tax (DST) as it aims to resume trade discussions with the U.S. government.

Finance Minister François Philippe Champagne noted that the tax would be rescinded in hopes of fostering a comprehensive trade agreement beneficial to both countries. This decision follows President Donald Trump’s announcement on Friday, where he criticized Canada’s DST decision, describing it as a “direct and blatant attack on our country.” He emphasized that the tax was “terrible.”

In a statement, Prime Minister Mark Carney noted that any negotiations concerning economic and security relations would prioritize the interests of Canadian workers and businesses. This shift is intended to navigate the new landscape of relations following Trump’s comments.

The Digital Services Tax could have imposed a 3% levy on the revenue of U.S. tech firms earning over $20 million in Canada, according to reports.

Champagne reiterated that the Canadian government is committed to building a robust economy and protecting the interests of its workforce. “By withdrawing the Digital Services Tax, we will enable negotiations on new economic and security ties with the United States, making significant progress,” he stated.

As of now, neither the White House nor the Canadian Treasury has responded to inquiries regarding this development.