Canada has scrapped its digital services tax targeting U.S. technology firms just hours before it was set to take effect, in a move aimed at reviving stalled trade negotiations with the United States.
Canada’s government announced late Sunday that it would withdraw its digital services tax (DST), which had targeted major U.S. technology firms, only hours before the measure was due to be enforced. The decision is part of an effort to restart high-level trade negotiations with the United States, which had broken down over the planned tax.
Canadian Prime Minister Mark Carney and U.S. President Donald Trump are expected to resume talks this week, with a goal to reach a new economic deal by 21 July, according to a statement from Canada’s finance ministry. The negotiations stalled on Friday when President Trump abruptly ended discussions, calling Canada’s tax on digital services a "blatant attack" on U.S. firms.
On Sunday, Trump threatened to impose new tariffs on Canadian goods within a week, raising the risk of renewed trade tensions between the two neighbours.
The now-cancelled digital services tax was designed to impose a 3% levy on revenue generated by digital services provided to Canadian users, applied to companies earning over $20 million annually from such services. The tax, retroactive to 2022, would have affected some of the world’s largest technology companies, including Amazon, Meta, Google and Apple.
Monday’s planned collection has been halted, the finance ministry said, and Finance Minister François-Philippe Champagne will bring forward legislation to formally rescind the Digital Services Tax Act.
"The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians," the ministry’s statement explained.
"Canada’s preference has always been a multilateral agreement related to digital services taxation."
Canada’s retreat from the digital tax comes after the Biden administration initiated trade dispute settlement consultations, arguing the measure breached the North American trade agreement. While Canada had avoided broad tariffs imposed by Trump in April, it still faces steep U.S. duties on steel and aluminium.
The announcement had an immediate impact on financial markets, with futures and Asian shares climbing as investors welcomed the news.
Canada remains the United States’ second-largest trading partner, buying $349.4 billion in U.S. goods last year and exporting $412.7 billion, according to U.S. Census Bureau data. Both governments now face a renewed push to resolve differences and reach a comprehensive trade deal before the July deadline.
Azerbaijan will begin supplying 6 million cubic metres of gas to Syria this week under a swap deal with Türkiye, officials said, aiming to boost elec...
Kazakhstan has once again come into the geopolitical spotlight, this time with American interests front and center....
The Russian state news agency has reported that Shahin Shykhlinski, head of the Azerbaijani diaspora in Yekaterinburg, has been declared wanted in con...
A two-day official visit by Kazakh President Kassym-Jomart Tokayev to Türkiye concluded with the signing of 20 agreements aimed at expanding the stra...
Thailand has accused Cambodian forces of opening fire across the disputed frontier on Wednesday, the second reported violation since a Malaysia-broker...
China and the US have agreed to extend the pause on 24% reciprocal tariffs after two days of trade talks in Sweden, Chinese trade official Li Chenggang announced Tuesday.
A gunman who killed four people and injured several others in a Manhattan office building left a note blaming the NFL for a brain injury he believed he had, New York officials said, linking the rampage to suspected chronic traumatic encephalopathy (CTE).
North Korea warned on Tuesday that the U.S. must accept new realities and that future talks will not lead to denuclearisation, signalling a hardened stance despite past summits with U.S. President Trump.
Tensions between Thailand and Cambodia have eased after a ceasefire ended five days of deadly border clashes, but military talks remain delayed and Bangkok plans to report violations to the U.S. and China.
The world’s biggest dance music festival faces an unexpected setback as a fire destroys its main stage, prompting a last-minute response from organisers determined to keep the party alive in Boom, Belgium.
Australian researchers have created a groundbreaking “biological AI” platform that could revolutionise drug discovery by rapidly evolving molecules within mammalian cells.
Australian researchers have pioneered a low-cost and scalable plasma-based method to produce ammonia gas directly from air, offering a green alternative to the traditional fossil fuel-dependent Haber-Bosch process.
A series of earthquakes have struck Guatemala on Tuesday afternoon, leading authorities to advise residents to evacuate from buildings as a precaution against possible aftershocks.
'Superman' continued to dominate the summer box office, pulling in another $57.25 million in its second weekend, as theatres welcome a wave of blockbuster competition following a challenging few years for the film industry.
Azerbaijan will begin supplying 6 million cubic metres of gas to Syria this week under a swap deal with Türkiye, officials said, aiming to boost electricity generation in the war-torn country.
Kazakhstan has once again come into the geopolitical spotlight, this time with American interests front and center.
Thailand has accused Cambodian forces of opening fire across the disputed frontier on Wednesday, the second reported violation since a Malaysia-brokered truce took effect at midnight on Monday.
At just 17 years old, Lamine Yamal is not only rewriting football’s record books, he’s rewriting what’s possible. From dazzling defences with Barcelona to setting records on the biggest international stages, this teenage phenomenon is already one of the most talked-about names in the sport.
Behind closed doors or at public summits, diplomacy quietly shapes our world. It’s more than handshakes, it’s about negotiation, persuasion, and preventing conflict. But how does diplomacy actually work, and what tools keep nations talking instead of fighting?
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment