Canadian Prime Minister Carney says trade talks with US resume after
Canada rescinded tech tax
[June 30, 2025] By
ROB GILLIES
TORONTO (AP) — Canadian Prime Minister Mark Carney said late Sunday
trade talks with U.S. have resumed after Canada rescinded its plan to
tax U.S. technology firms.
U.S. President Donald Trump said Friday that he was suspending trade
talks with Canada over its plans to continue with its tax on technology
firms, which he called “a direct and blatant attack on our country.”
The Canadian government said “in anticipation” of a trade deal “Canada
would rescind” the Digital Serves Tax. The tax was set to go into effect
Monday.
Carney and Trump spoke on the phone Sunday, and Carney’s office said
they agreed to resume negotiations.
“Today’s announcement will support a resumption of negotiations toward
the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit
in Kananaskis,” Carney said in a statement.
Carney visited Trump in May at the White House, where he was polite but
firm. Trump traveled to Canada for the G7 summit in Alberta, where
Carney said that Canada and the U.S. had set a 30-day deadline for trade
talks.
Trump, in a post on his social media network last Friday, said Canada
had informed the U.S. that it was sticking to its plan to impose the
digital services tax, which applies to Canadian and foreign businesses
that engage with online users in Canada.
The digital services tax was due to hit companies including Amazon,
Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian
users. It would have applied retroactively, leaving U.S. companies with
a $2 billion U.S. bill due at the end of the month.
Daniel Béland, a political science professor at McGill University in
Montreal, called Carney's retreat a “clear victory" for Trump.
"At some point this move might have become necessary in the context of
Canada-US trade negotiations themselves but Prime Minister Carney acted
now to appease President Trump and have him agree to simply resume these
negotiations, which is a clear victory for both the White House and big
tech," Béland said.
[to top of second column] |
Canadian Prime Minister Mark Carney holds a closing press conference
following the NATO Summit in The Hague, Netherlands on Wednesday,
June 25, 2025. (Sean Kilpatrick/The Canadian Press via AP)
 He said it makes Carney look
vulnerable to President Trump’s outbursts.
“President Trump forced PM Carney to do exactly what big tech
wanted. U.S. tech executive will be very happy with this outcome,”
Béland said.
Canadian Finance Minister François-Philippe Champagne also spoke
with U.S. Treasury Secretary Scott Bessent on Sunday.
“Rescinding the digital services tax will allow the negotiations of
a new economic and security relationship with the United States to
make vital progress,” Canadian Finance Minister François-Philippe
Champagne said in a statement.
Trump’s announcement Friday was the latest swerve in the trade war
he’s launched since taking office for a second term in January.
Progress with Canada has been a roller coaster, starting with the
U.S. president poking at the nation’s northern neighbor and
repeatedly suggesting it would be absorbed as a U.S. state.
Canada and the U.S. have been discussing easing a series of steep
tariffs Trump imposed on goods from America’s neighbor.
Trump has imposed 50% tariffs on steel and aluminum as well as 25%
tariffs on autos. He is also charging a 10% tax on imports from most
countries, though he could raise rates on July 9, after the 90-day
negotiating period he set would expire.
Canada and Mexico face separate tariffs of as much as 25% that Trump
put into place under the auspices of stopping fentanyl smuggling,
though some products are still protected under the 2020
U.S.-Mexico-Canada Agreement signed during Trump’s first term.
All contents © copyright 2025 Associated Press. All rights reserved |
