The United States will start trade talks with Canada again after Ottawa removed its digital services tax plan for American tech companies which was a major point of conflict between the two nations.
White House economic adviser Kevin Hassett announced the decision on Monday because President Donald Trump requested Canada to eliminate the tax during the G7 summit. According to Hassett the Canadian government studied the proposal before agreeing to move forward with the United States.
Canada planned to introduce the tax on July 1 as a way to tax major digital platforms including Amazon, Meta and Google. The tax measure created an obstacle for wider trade negotiations between the two countries because Trump used tariffs as a threat and implemented aggressive trade policies.
The tax repeal creates possibilities for new trade discussions before the July 9 deadline when Trump announced his plan to impose severe retaliatory tariffs. The administration works to establish bilateral trade agreements with essential trading partners while reorganizing all U.S. trade relationships.
The change demonstrates a possible improvement in North American trade relations while showing how Trump’s high-stakes tariff threats influence worldwide diplomatic negotiations during his second presidential term.
