Kathmandu. Canada has announced that it will roll back tariffs that hit US technology companies.
Canada’s announcement to impose tariffs on US companies Alphabet and Amazon in retaliation for tax hikes announced by US President Donald Trump prompted the two countries to cancel trade talks.
Analysts say that a digital services tax implemented last year will cost US service providers such as Alphabet and Amazon billions of dollars in Canada by Monday. Washington had previously requested talks to resolve the dispute over the tax, but on Friday President Trump said he was ending trade talks with Ottawa in exchange for the tariffs.
He also warned that Canada would know its new tariff rate within this week. Ottawa on Sunday scrapped the tax, which was expected to bring in C$59 billion (about $42 billion) over five years.
Canada will scrap the Digital Services Tax (DST) in anticipation of a comprehensive, mutually beneficial trade agreement with the United States, Canadian Finance Minister François-Philippe Champagne announced.
Trump and Canadian Prime Minister Mark Carney agreed to resume talks with the aim of reaching an agreement by July 21, 2025, the statement said. There was no immediate comment from the White House or US President Trump.
US Treasury Secretary Scott Besant told CNBC on Friday that Washington hoped the Carney government would hold off on the tariffs as a “goodwill gesture”. President Trump said Canada was somewhat shielded from tariffs imposed on other countries but faced a separate tax regime.
After returning to the White House in January, Trump also imposed heavy tariffs on steel, aluminium and car imports. Canada is the largest supplier of foreign steel and aluminium to the United States. Last week, Carney said Ottawa would increase its 25 per cent retaliatory tariffs on US steel and aluminium and double tariffs on US metals to 50 per cent if a bilateral trade deal is not reached within 30 days.
“We will continue these complex negotiations in the best interest of Canadians,” Carney said on Friday. He had previously said the talks would “stabilise our trade relationship with the US” and “provide ready access to the US market for Canadian companies” and “not tie our hands in terms of our dealings with the rest of the world.”
They had said the talks would “stabilise our trade relationship with the US” and “provide ready access to the US market for Canadian companies” and “not tie our hands in terms of their dealings with the rest of the world.” Carney and Trump met earlier this month on the sidelines of the G-7 summit in Canada, where leaders at the summit pressed Trump to back off from a punitive trade war.
A dozen countries have set a July 9 deadline for U.S. tariffs to rise from the current 10 percent. Whether they can successfully reach a deal before the deadline remains to be seen. Besant said Washington could complete its trade deal agenda by September, signaling that more deals could be struck.
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