The US will resume trade negotiations with Canada immediately after Ottawa scrapped its digital services tax targeting US technology firms, White House economic adviser Kevin Hassett said yesterday.
“Absolutely,” Hassett said on Fox News Channel when asked about the talks restarting.
President Donald Trump had asked the Canadians to take the tax off at the G7 meeting in Canada, he said. “It’s something that they’ve studied, now they’ve agreed to, and for sure, that means that we can get back to the negotiations.”
Canada halted its plans to begin collecting a new digital services tax targeting US technology firms just hours before this was due to start yesterday in a bid to advance stalled trade negotiations with the US.
Canada’s finance ministry said late on Sunday that Prime Minister Mark Carney and Trump would resume trade negotiations in order to agree on a deal by July 21.
“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” US Commerce Secretary Howard Lutnick responded in a post on X.
Stocks hit record highs on Wall Street yesterday morning as sentiment in the markets rose amid optimism about US trade negotiations with key partners, including Canada.
US Treasury Secretary Scott Bessent also struck an optimistic tone over the potential for “a flurry” of trade deals ahead of a July 9 deadline, after which 10 per cent US tariff rates on imports from many countries are set to snap back to Trump’s April 2 announced rates of 11pc to 50pc.
But Bessent, speaking on Bloomberg Television, warned that countries may not get extensions from that deadline, even if they are negotiating in good faith as he suggested previously. Any extensions would be up to Trump himself, Bessent said.
Trump abruptly called off trade talks with Canada on Friday over Ottawa’s digital services tax, saying it was a “blatant attack.” He reiterated this on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push US-Canada relations back into chaos after a period of relative calm.
“We have countries that are negotiating in good faith, but they should be aware that if we can’t get across the line because they are being recalcitrant, then we could spring back to the April 2 levels,” Bessent said. “I hope that won’t have to happen.”
Trump and Carney met at a G7 summit earlier this month, with the Canadian prime minister saying they had agreed to wrap up a new economic agreement within 30 days.
Canada’s planned digital tax was 3pc of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022. It would have impacted giant US technology firms including Amazon.com, Meta, Alphabet’s Google and Apple.
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