Canada Drops Digital Tax After Trump Halts Trade Talks

Canada has officially scrapped its controversial Digital Services Tax after President Donald Trump announced the immediate termination of trade negotiations over what he called a “blatant attack” on American technology companies.

The decision, announced Sunday by Canada’s Department of Finance, reverses a policy that would have cost U.S. tech giants like Amazon, Google, Meta, and Apple an estimated $2.3 billion annually. The tax was set to take effect Monday.

Canada’s Finance Minister François-Philippe Champagne issued a face-saving statement, saying, “Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress.”

But make no mistake this was no act of diplomacy. This was a direct result of Trump’s bold America First strategy and refusal to tolerate unfair treatment of American businesses abroad.

What triggered Canada’s reversal?

• On Friday, Trump blasted the digital tax as “egregious” and “a direct and blatant attack on our Country.”

• He immediately terminated all ongoing trade discussions and threatened to announce retaliatory tariffs within seven days.

• Within 48 hours, Canada folded.

Earlier this month, Champagne had defiantly insisted the tax “was going ahead,” ignoring U.S. objections. But Trump’s swift and public rebuke on Truth Social changed the equation:

“Canada, a very difficult Country to TRADE with... has just announced that they are putting a Digital Services Tax on our American Technology Companies... we are hereby terminating ALL discussions on Trade with Canada.”

The message was received loud and clear. Prime Minister Mark Carney quickly followed with a statement Sunday, saying he and Trump agreed to resume talks with the goal of reaching a comprehensive trade agreement by July 21.

This outcome is another example of how Trump’s unapologetic negotiation tactics used effectively against China, Mexico, and now Canada get results. While the Biden administration talked about multilateralism and global cooperation, Trump demanded respect for American workers and businesses.

With the EU deadline looming and Trump holding firm on potential 50% tariffs on European imports, other nations are likely to follow Canada’s lead. Trump isn’t just leveling the playing field he’s owning it.

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