Canada caves to Trump on digital services tax as countries set to resume trade talks

Canada announced Sunday that it is acquiescing to President Donald Trump’s demand to drop its digital services tax on U.S. companies to resume trade negotiations with the White House.

Trump revealed on Friday he had cut off trade talks with Canadian Prime Minister Mark Carney due to Ottawa’s refusal to ax the tax, which was estimated to cost U.S.-based tech giants over $2 billion annually. The president called the excise fee a “direct and blatant attack on our Country” and threatened higher tariffs on imports from Canada. The tax, which went into effect in June, required large U.S. tech companies such as Apple and Google to pay a 3% tax on revenues above $20 million earned from engaging with online users in Canada.