Canada has temporarily halted its tax on digital services provided by major U.S. technology companies, a move intended to facilitate broader trade negotiations with the United States.
According to a statement released by Finance Minister Francois-Philippe Champagne, Canada will suspend the Digital Services Tax (DST) “in anticipation of a comprehensive trade agreement that is mutually beneficial”. The move is designed to create a more favorable environment for ongoing discussions between the two nations.
The suspension follows a swift escalation in tensions, with U.S. President Trump having announced on Friday the termination of “all” trade talks with Canada over the digital tax.
In conjunction with the tax suspension, Prime Minister Carney and President Trump have agreed to resume negotiations with the goal of reaching an accord by July 21st. The outcome of these renewed talks will be closely watched by both countries and globally, as it could set a precedent for the taxation of technology companies and the management of international trade relations.