Canadian government repeals digital services tax in anticipation of trade deal with Trump's US administration



In response to Canada's announcement that it would impose a 'digital services tax' on American IT companies, US President Donald Trump announced that he was 'terminating all trade discussions with Canada.' In response, Canada announced that it would 'withdraw the digital services tax in order to advance broader trade negotiations with the US.'

Canada rescinds digital services tax to advance broader trade negotiations with the United States - Canada.ca

https://www.canada.ca/en/department-finance/news/2025/06/canada-rescinds-digital-services-tax-to-advance-broader-trade-negotiations-with-the-united-states.html



Canada's digital services tax was enacted in 2024 and was to be levied on American IT companies such as Google, Amazon, and Meta. The amount to be paid is estimated to be $3 billion (about 435 billion yen), and the deadline for payment was declared to be June 30, 2025.

However, President Trump made it clear that he was halting negotiations with Canada, saying, 'Canada has just announced that it will impose a digital services tax on American technology companies. This is a direct and undisguised attack on our country. The EU is doing the same thing, and we are in discussions with them, but they have now copied us. In response to this egregious tax, we have decided to immediately terminate all trade negotiations with Canada.'

President Trump announces 'termination of all trade talks with Canada', in opposition to Canada's digital services tax on US companies - GIGAZINE



François-Philippe Champagne, Canada's Minister of Finance and Revenue, announced that Canada will repeal its digital services tax in anticipation of the conclusion of a mutually beneficial comprehensive trade agreement with the United States. The collection of the digital services tax, which was set to expire on June 30, 2025, will be suspended, and the law that established the digital services tax will also be repealed.

In conjunction with this move, the Canadian government stated that 'Prime Minister Carney and President Trump will resume negotiations with the aim of reaching an agreement by July 21, 2025.'



'I'm grateful to Canada for repealing the digital services tax, which was intended to stifle American innovation and would have been an obstacle to any trade agreement with the United States,' U.S. Secretary of Commerce Howard Lutnick said in a statement on Twitter.

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