Trade Talks Between Canada and the U.S. Resume After Tax Plan Reversal
Toronto — Canadian Prime Minister Mark Carney announced on Sunday that trade discussions with the United States have resumed following Canada’s decision to abandon its plan to tax American technology companies.
U.S. President Donald Trump had previously suspended trade talks on Friday, criticizing Canada’s digital services tax as “a direct and blatant attack on our country.” In response, the Canadian government indicated that it would drop the tax in hopes of reviving negotiations.
In a phone call on Sunday, Carney and Trump agreed to restart discussions, with Carney noting that this development would help move toward a trade timeline set during the recent G7 Leaders’ Summit in Kananaskis, aimed for July 21, 2025.
Earlier this year, Carney visited Trump at the White House, where he maintained a polite but assertive stance regarding trade discussions. Trump had previously made a trip to Canada for the G7 summit in Alberta, during which both leaders set a 30-day deadline for negotiations.
Trump’s criticism of Canada came after the latter confirmed its intent to proceed with the digital services tax, which would impose a 3% levy on companies like Amazon and Google, targeting their revenue generated from Canadian users. This tax, set to take effect imminently, could have left U.S. businesses facing a hefty bill.
Political analyst Daniel Béland from McGill University described Carney’s decision to abandon the tax as a “clear victory” for Trump, suggesting that the move was made to facilitate the resumption of trade talks that are crucial for both nations.
Finance Minister François-Philippe Champagne emphasized that retracting the digital services tax is essential for advancing negotiations on a new economic and security relationship with the U.S.
Trump’s recent announcements are part of ongoing trade negotiations, which have proven to be quite tumultuous since his second term began. Relations with Canada have been marked by ups and downs, with Trump occasionally suggesting that Canada might be absorbed as a U.S. state.
The two countries are also engaging in discussions about easing some of the tariffs that Trump had imposed on Canadian goods. These included steep tariffs on steel, aluminum, and automobiles, which have affected trade dynamics significantly.
In summary, with Canada retracting its planned tax on tech firms, the stage is set for renewed negotiations that may reshape the economic landscape between Canada and the U.S. as both sides work to establish a more cooperative relationship.
