U.S. and Canada resume trade talks after Ottawa drops digital tax

Trade tensions between the United States and Canada eased dramatically over the weekend, as U.S. President Donald Trump and Canadian Prime Minister Mark Carney agreed to resume negotiations aimed at reaching a “mutually beneficial” trade agreement by July 21, 2025. The announcement came from Canadian Finance Minister Francois-Philippe Champagne, while the White House and President Trump have yet to comment.

“This announcement ensures the resumption of negotiations ahead of the July 21 deadline set at this month’s G7 Leaders’ Summit in Kananaskis,” said Carney.

In a significant gesture, Ottawa has agreed to withdraw its digital services tax targeting U.S. tech companies — a move that had prompted Trump to abruptly suspend all trade discussions with Canada and threaten new tariffs just days earlier.

“The repeal of the digital services tax will allow us to make crucial progress in negotiations for a new economic and security relationship with the United States,” Champagne said, adding that the decision supports Canada’s goals of job creation and economic prosperity.

The 3% digital tax, introduced in 2020, was aimed at tech giants such as Amazon, Alphabet (Google), and Meta, and was projected to raise CAD 5.9 billion (around USD 4.2 billion). The tax was due to come into force on June 30, prompting repeated objections from the White House.

So far, Canada has avoided the harshest tariffs imposed by the Trump administration on other trading partners, thanks to a separate tariff framework. However, it remains subject to duties on steel and aluminum, commodities in which it is a key supplier to the U.S.