President Donald Trump will resume trade talks with Canadian Prime Minister Mark Carney after Canada decided late Sunday to rescind its 3% digital services tax on U.S. companies that profit from Canadian customers.
The tax was rescinded "in anticipation of a mutually beneficial comprehensive trade arrangement with the United States," the Canadian government said.
"Consistent with this action, Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025," Canada’s Department of Finance said in a news release.
The tax was due to be collected on Monday June 30, but that has now been halted.
Legislation in Canada to rescind the tax is expected to be enacted in the near future.
The tax has been in effect for roughly a year. It impacts companies including Amazon, Meta, Google, and Apple.
Trump terminated the trade talks on Friday because of the tax.
"They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump wrote in a post on Truth Social.
Trump also posted that Canada is "a very difficult Country to TRADE with" and has imposed 400% tariffs on some dairy products it exports to the U.S.
Canada is currently the largest trading partner of the U.S., so the lack of a deal would impact markets in both countries.
More U.S. exports go to Canada than any other country, and Canada is a major supplier to the U.S. of crude oil, natural gas, and electricity.
Trump knows he has to make a deal with Canada, but he also wants to fight for fairness in the trade between the two countries.
Outside of oil imports, the U.S. has a trade surplus with Canada, but with the oil included, there is a deficit.
Canada also holds over $300 billion of U.S. debt, but also owes the U.S. a significant amount of money.
