[CTC] Canada rescinds digital services tax after Trump suspends trade talks

[Arthur Stamoulis]

*Article and two press statements below...*


https://www.washingtonpost.com/world/2025/06/30/canada-cancel-digital-services-tax-trump/


Canada rescinds digital services tax after Trump suspends trade talks
*Ottawa said Prime Minister Mark Carney and President Donald Trump had
agreed to resume negotiations on a trade agreement and would aim to reach a
deal by July 21.*


TORONTO — Canada late Sunday said it would rescind a new tax it planned to
collect from large tech companies after President Donald Trump last week
called the levy a “blatant attack” on the United States and said he
would suspend
trade talks
<https://www.washingtonpost.com/politics/2025/06/27/trump-canada-digital-services-negotiations/>
with
Ottawa over it.

In a statement, the Canadian government said Prime Minister Mark Carney and
Trump had agreed to resume negotiations on a “mutually beneficial
comprehensive trade agreement” and would aim to reach a deal by July 21.

The Trump administration on Monday claimed a win.

“President Trump has once again leveraged the power of the American
economy, the best and biggest in the world, to deliver a victory for
American industries and workers,” said White House spokesman Kush Desai.

Kevin Hassett, director of the White House National Economic Council, said
in an interview with Fox News on Monday that the U.S. would “absolutely”
resume trade talks with Ottawa.

Canada’s move came hours before it was set to begin collecting the first
payments from a digital services tax it implemented last year. The levy
would have applied to tech firms such as Google, Apple, Meta and Amazon.
(Amazon founder Jeff Bezos owns The Washington Post.)

A trade group representing those companies last week estimated that the
tax, which would apply to revenue earned from social media services and
online marketplaces involving Canadian users, would collectively cost U.S.
firms as much as $2.3 billion annually.

Canada’s parliamentary budget watchdog had estimated that the tax would
increase government revenue by more than $5 billion over five years.

The tax has long drawn opposition from Washington. The Biden administration
argued that it discriminated against U.S. companies. Canadian business
groups have also criticized the levy, in part because they believed it
could strain U.S.-Canada ties and imperil a key trade relationship.

On Friday, it appeared their worst fears were confirmed. Trump said
he would suspend trade talks over the tax, thrusting U.S.-Canada
relations into deeper turmoil.

Ties between the neighbors have been under severe strain since
Trump returned to the Oval Office and put Canada in his crosshairs. He
has imposed several sets of tariffs on Canadian goods, questioned Canada’s
viability as a country and threatened to use “economic force” to make it
the 51st state. Canada sends more than three-quarters of its exports to the
U.S., and the tariffs are weighing on its economy.

“Economically, we have such power over Canada,” Trump told reporters Friday
in the Oval Office after he announced the suspension of trade negotiations
in a social media post. “I’d rather not use it, but they did something with
our tech companies … We have all the cards.”

Two days later, Canada bowed to pressure and scrapped the tax in a bid to
salvage the trade negotiations. In its statement Sunday, the Canadian
government said it would soon introduce legislation in Parliament to cancel
the tax.

Carney, who swept to power in a federal election in April by casting
himself as the person best placed to handle Trump, appeared to have a more
cordial relationship with the U.S. president than his predecessor, Justin
Trudeau. Trump and Carney had agreed to accelerate talks to reach a new
trade agreement at the Group of Seven summit that Canada hosted earlier
this month, and officials in both countries said the pair were in direct
contact over the negotiations.

“Prime Minister Carney has been clear that Canada will take as long as
necessary, but no longer, to achieve that deal,” the government said in the
statement.


=====

*Trump Bullies Canada **on Behalf of Big Tech asWorkers Continue to Lose
Out*

For Immediate Release: June 30, 2025

Contact: Emily Leach, eleach at citizen.org

WASHINGTON, D.C. — On June 29, Canada announced
<https://www.canada.ca/en/department-finance/news/2025/06/canada-rescinds-digital-services-tax-to-advance-broader-trade-negotiations-with-the-united-states.html>
that
it would drop its 3 percent digital services tax on major technology
companies like Apple, Amazon, and Google. The news comes days after
President Trump announced he would be “terminating” all trade discussions
with Canada
<https://subscriber.politicopro.com/article/2025/06/trump-canada-trade-talks-pro-00429665>
because
of its digital tax, and that he would announce new tariffs on Canada within
the next seven days.

Research published by Public Citizen has shown how large corporations
<https://www.citizen.org/article/corporations-and-billionaires-funnel-millions-into-trump-inauguration-committee/>,
and Big Tech companies in particular, have contributed huge sums of money
to Trump’s inauguration fund. Trump is now providing a return on investment
(to these companies) byweaponizing trade negotiations
<https://www.citizen.org/article/90-deals-in-90-days/> to extract unfair
concessions from countries around the world.

*Melinda St Louis, director of Public Citizen’s Global Trade Watch *released
the following statement:

“The Trump administration is carrying water for Big Tech companies by
weaponizing tariff negotiations to ensure that countries are unable to
regulate and tax American technology companies. Using sweeping trade
threats to target Canada’s digital services taxes is just the latest
example of the Trump administration forcing global deregulation to further
enrich the world’s biggest tech corporations.

“Caving to Trump’s bullying on behalf of Big Tech is not a wise move for
foreign governments, which is likely to  spur the administration to make
further demands. The trade agreement between the U.S. and U.K., which
excludes mention of the U.K.’s digital services tax for now, shows that
countries do have a choice to stand up to Trump’s unfair demands.

“President Trump’s actions aren’t going to restore American industry,
revitalize the middle class, or stabilize our economy. Instead, he is using
the threat of tariffs to push more corporate-dominated (and likely corrupt)
deals that will harm consumers, workers, and the world.”

*Background*

Digital Services Taxes
<https://www.citizen.org/article/understanding-digital-services-taxes/> (DSTs)
are taxes on the gross revenues, the total amount a business earns, derived
from the provision of digital services to users in a specific jurisdiction.
They are typically imposed when a country is not able to receive adequate
income tax payments from digital companies operating in their jurisdiction.

Canada enacted a law in 2024, to apply DSTs to large technology companies.
This followed the break-down of international negotiations and U.S
withdrawal
<https://www.whitehouse.gov/presidential-actions/2025/01/the-organization-for-economic-co-operation-and-development-oecd-global-tax-deal-global-tax-deal/>
from
an Global Tax Deal supported by the Organisation for Economic Co-operation
and Development (OECD). The U.S. has also initiated dispute resolution
proceedings
<https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/august/united-states-requests-usmca-dispute-settlement-consultations-canadas-digital-services-tax>
against
Canada under the US-Mexico-Canada Free Trade Agreement (USMCA) alleging
that the tax violates “non discrimination” provisions of the agreement,
despite the tax applying to all companies that meet the relevant revenue
and related thresholds.

President Trump has made it clear
<https://www.citizen.org/news/president-trumps-reciprocal-tariffs-are-nothing-but-a-shakedown-on-behalf-of-big-tech/>,
including in his April 2 “Liberation Day” speech when he announced the
imposition of supposed “reciprocal tariffs”, that his administrationwould
target digital economy regulations
<https://www.citizen.org/news/2025-annual-ustr-report-resurrects-corporate-wishlist-attacking-climate-health-and-digital-regulation/>
imposed
by foreign countries including their privacy, data protection and
anti-monopoly regulations
<https://www.citizen.org/news/statement-on-national-trade-estimates-report-and-coercive-tariffs/>.
This has prompted several
<https://www.warren.senate.gov/newsroom/press-releases/icymi-warren-presses-trump-trade-officials-prioritizing-big-tech-friendly-trade-deals-at-expense-of-everyday-americans#new_tab>
members
<https://casar.house.gov/media/press-releases/news-congressmen-greg-casar-gabe-amo-senator-murphy-lead-call-acting-inspector>
of
Congress, as well as digital rights and consumer groups
<https://dtalliance.org/2025/04/16/dta-statement-on-nte-report-and-coercive-tariffs/>
to
call out the U.S. administration for using trade talks to benefit his
oligarch benefactors while weakening essential consumer and public interest
protections in an increasingly dangerous digital ecosystem.

It has been reported
<https://www.wsj.com/economy/trade/u-s-eu-near-deal-on-non-tariff-trade-irritants-455c42f1?gaa_at=eafs&gaa_n=ASWzDAhDdPSH2HpiJKme8RJCm3zJ18vj5BhmOg6iq0Gr_jWXBNX7Pf1hG0erOt4EBe4%3D&gaa_ts=6862aaf6&gaa_sig=roxovB4EyDaZlZ73235dZ05TqQah60lsJGvbA6XHZKn-kE6SDfj2Fq40SFqO8hmnCsHjeu7nywwwZ2Tq5PVtXg%3D%3D>
that
the U.S. and EU may be nearing an agreement to avoid Trump’s punitive
tariffs that includes concessions from the EU to exclude U.S. tech
companies from enforcement of some of its digital regulations. This too,
has beenopposed
<https://tacd.org/tacd-opposes-the-use-of-coercive-tariffs-by-the-u-s-to-attack-eu-laws-protecting-people/>
by
consumer and digital rights groups from both sides of the Atlantic.

###



=====

https://tradejusticeedfund.org/statement-on-canadas-residence-of-digital-services-tax-after-trump-suspended-trade-talks/

*Statement on Canada’s Residence of Digital Services Tax after Trump
Suspended Trade Talks*

Washington, D.C. — In response to reporting that the Canadian government is
rescinding a tax aimed at large tech corporations in the face of trade
pressure from U.S. President Donald Trump, Arthur Stamoulis, executive
director of the Trade Justice Education Fund, released the following
statement:

“Leveraging tariff threats to help Big Tech billionaires get new tax cuts
is not the change that working people need.

“Working Americans and people the world over need policies that promote
good-paying jobs, expanded manufacturing and supply chain resilience — not
more giveaways to corporate elites. Today’s news is just another example of
the rigged deal making that has so many Americans livid about U.S. trade
priorities.”

###





Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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