Canada agrees to rescind digital services tax following threats from Trump

During this year’s election campaign, Canadian Prime Minister Mark Carney repeatedly pledged that he would stand up to President Donald Trump.

Yet in a shocking development, the leader of Canada recently caved on one of Trump’s major trade demands. 

Digital services tax cancelled

According to the Daily Caller, Canadian Finance Minister François-Philippe Champagne announced in a statement this past weekend that the government would rescind its digital services tax (DST).

“Canada’s new government is focused on building the strongest economy in the G7 and standing up for Canadian workers and businesses,” Champagne said.

“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” he added.

Carney spoke up as well, claiming that he “will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses.”

“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,” the prime minister went on to insist.

Trump threatened to halt trade negotiations with Canada

The Daily Caller noted how that move came after Trump revealed on Friday that he would be halting further trade negotiations with Canada.

“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also,” the president complained in a social media post.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he warned.

“We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump insisted.

Tax would have affected companies like Meta

The Daily Caller reported that the DST was aimed at large digital services companies such as Meta, the parent company of Facebook.

Under its provisions, such companies would be forced to hand over 3% of the revenue they make from Canadian users beyond $20 million Canadian dollars.

This weekend’s news was heralded in a statement from White House spokesman Kush Desai, who told the Daily Caller, “President Trump has once again leveraged the power of the American economy, the best and biggest in the world, to deliver a victory for American industries and workers.”

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