Saturday, March 29, 2025
Canada-US Trade Talks Resume After Digital Tax Withdrawal: PM Mark Carney
In a significant diplomatic turn, Canadian Prime Minister Mark Carney announced that trade talks with the United States have officially resumed following Canada’s decision to scrap its proposed digital services tax. The tax, which was set to go into effect on Monday, had threatened to derail bilateral negotiations.
The move came after US President Donald Trump, on Friday, called the digital tax plan a “direct and explicit attack on our country” and declared the suspension of trade discussions. However, the situation shifted quickly over the weekend.
Speaking on Sunday (local time), Carney confirmed that after withdrawing the proposed tax targeting American tech giants, both sides have agreed to restart trade negotiations. “Today’s announcement supports the timeline for renewed dialogue ahead of the G7 leaders’ summit scheduled for July 21, 2025, in Kananaskis,” Carney said in an official statement.
Carney’s office further confirmed that both leaders—Carney and Trump—are committed to advancing the stalled trade discussions. The G7 summit in Alberta is expected to serve as a milestone event for reaffirming economic cooperation between the two countries.
The digital services tax would have imposed a 3% levy on revenue generated from Canadian users by multinational tech companies like Google, Amazon, Meta, Uber, and Airbnb. It was projected to be applied retroactively, potentially resulting in a combined $2 billion tax bill for US firms by the end of the month.
President Trump had taken to social media on Friday to criticize Canada’s tax plan, revealing that Canada had informed the US of its intentions to move forward with the tax. “This measure targets both Canadian and foreign companies that engage with online users in Canada,” Trump posted, reigniting tensions that have marked his second term since returning to office in January 2025.
In response, the Canadian government stated its willingness to drop the tax in hopes of reaching a broader trade agreement with the US.
Trade relations between the two nations have seen numerous ups and downs under Trump’s leadership. He has previously mocked Canada, even suggesting at times that it could be absorbed as a US state. Despite the rhetoric, both administrations now appear to be steering towards pragmatic cooperation.
In May, Carney visited the White House for a face-to-face meeting with Trump. Their interaction was described as “cordial but firm,” laying the groundwork for future engagement.
Following a reciprocal visit by Trump during the G7 preparations in Alberta, both leaders agreed on a 30-day timeline to advance trade discussions, which now appear to be back on track.
