Finance Minister François-Philippe Champagne wrote on X overnight that Canada has withdrawn its controversial Digital Services Tax (DST) on Silicon Valley tech giants, such as Alphabet and Meta, in order to restart stalled trade negotiations with the Trump administration. It's another win for President Trump, as his 'Art of the Deal' tactics continue to bring far-left progressive countries back in line with his 'America First' agenda.
"Canada is engaged in complex negotiations on a new economic and security partnership with the U.S.," Champagne wrote on X late Sunday.
He continued, "Rescinding the DST will allow the
negotiations to make vital progress and reinforce our work to create
jobs and build prosperity for all Canadians."
Canada is engaged in complex negotiations on a new economic and security partnership with the U.S.
— François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) June 30, 2025
Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.
🔗https://t.co/hsiDxk7JVD
As a fresher, Canada's DST was a 3% tax on the revenue that big tech companies earn from Canadian users, specifically from online advertising, marketplaces, and user data.
Canada's move follows President Trump's Friday afternoon announcement calling for all trade discussions with the country to be terminated. He also threatened to impose new tariffs within a week.
Also last Friday, Treasury Secretary Scott Bessent told CNBC that U.S. Trade Representative Jamieson Greer would investigate the tax to "determine the amount of harm to the U.S. companies and the U.S. economy in general."
The stakes are high for Canada, as three-quarters of its exports are shipped to the U.S.—including energy products, other commodities, and automobiles—so tariffs would be devastating to the local economy.
Canada has taken the common-sense approach of returning to the negotiating table with Trump to work out a trade deal that benefits everyone.
UBS analyst Jason Cheng commented overnight on the developments:
Canada has withdrawn its digital services tax on technology companies in a move to restart trade talks with the U.S. This came after the pause in talks last Friday when U.S. President Donald Trump called an end to discussions with Canada, in retaliation for the digital tax. USDCAD is trading lower post the headline.
Daniel Béland, a political science professor at McGill University in Montreal, told AP News that Canadian Prime Minister Mark Carney's retreat was a "clear victory" for Trump.
"President Trump forced PM Carney to do exactly what big tech wanted. U.S. tech executive will be very happy with this outcome," Béland said.
Moments ago, Commerce Secretary Howard Lutnick thanked Canada for removing the DST tax.
Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America. https://t.co/b944wQ4cyn
— Howard Lutnick (@howardlutnick) June 30, 2025
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