Trump officials hail U-turn as Mark Carney says decision to rescind digital services tax means revival of trade talks
The United States has said that Canada’s prime minister Mark Carney “caved” to demands from the White House after his government abruptly scrapped their digital services tax on US technology companies, which was set to go into effect on Monday.
“It’s very simple. Prime minister Carney and Canada caved to president [Donald] Trump and the United States of America,” press secretary Karoline Leavitt said in a daily briefing.
“The president made his position quite clear to the prime minister and the prime minister called the president last night to let the president know that he would be dropping that tax.”
Carney told reporters on Monday his decision to backtrack on a controversial tax was meant to revive trade negotiations with the United States after Trump halted talks on Friday, alleging a Canadian effort to coax payments from American tech heavyweights operating in Canada was a “direct and blatant attack on our country”.
On Monday, White House economic adviser Kevin Hassett told Fox News that Canada’s decision “absolutely” meant both sides would resume talks.
In an announcement late on Sunday, Carney said key talks with the administration would resume now Canada had repealed the levy, which applied to US tech companies such as Meta, Amazon, Google parent Alphabet, Uber and Airbnb.
Canada’s finance ministry said Carney and Trump would resume trade negotiations in order to agree a deal by 21 July.
The tax was first announced in 2020 and was designed to remedy the fact that many large American technology companies operating in Canada did not pay tax on revenues generated from Canadians.
