Trump forced Canada to repeal tax on big tech companies

Canada has agreed to repeal its 3% digital tax (DST) on large technology companies, following demands from US President Donald Trump, published on his Truth Social network, Gizmodo reports.

"Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States," Canadian Finance Minister François-Philippe Champagne said in a statement released Sunday evening. He said the tax, scheduled to be collected on June 30, will be suspended.

The decision followed Trump's sharp address on Truth Social on Friday, when he announced that because of DST, "we are immediately terminating all trade discussions with Canada." In less than 48 hours, Ottawa reversed its position.

Canadian Prime Minister Mark Carney and President Trump "agreed to resume negotiations with the aim of reaching an agreement by July 21, 2025," Champagne added.

Canada implemented DST last year, imposing a 3% tax on domestic revenues of large digital companies such as Amazon, Google and Meta. Ottawa estimates that it could generate about C$3 billion a year, but US officials have argued that the tax unfairly targets US firms. Earlier this year, Donald Trump threatened to impose significant tariffs on any country that implements DST and taxes big US tech companies.

Canadian and American business associations, as well as U.S. lawmakers and technology groups, have called for the tax to be temporarily suspended or repealed. But only Trump's threat has prompted a hasty review of the decision.

Prime Minister Carney outlined the decision as part of broader negotiations on a North American economic and security partnership. "In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses," he said.