Trump Bullies Canada Into Killing Its Big Tech Tax

Donald Trump has reasons to celebrate. In an incredibly rapid reversal, Ottawa gave in to its requests and canceled a controversial tax for American technology giants, ending a confrontation that started on Friday.

“Canada would cancel the digital services tax (DST) in anticipation of a complete commercial arrangement that is beneficial with the United States,” said finance minister François-Philippe statement Sunday evening.

After the announcement, Prime Minister Mark Carney and President Trump “agreed that the parties will resume negotiations to agree on an agreement by July 21, 2025.”

It marks an amazing and fast victory for Trump, who shocked the markets on Friday with a job on his social platform of truth. He declared This is due to Canada’s decision to impose digital services tax on American technological companies, “we finish all trade discussions with Canada, with immediate effect.”

For Trump, this capitulation offers a well -necessary political victory at a critical moment. His presidency was defined by an aggressive commercial policy “America First”, launching trade wars with high issues with prices on goods from China and Europe. This style of confrontation now comes to a head, while a deadline of July 9 approach nations around the world in order to finalize new trade agreements with the United States or to face a new wave of steep and reciprocal prices. “Force a key ally like Canada to bend so quickly and publicly sends a powerful message to other negotiation partners.

Victory also helps Trump to project force on the inner front after a bruised political confrontation. His signature legislative priority, the “One Big Beautiful Bill”, faced intense criticism, even former allies like Elon Musk, on its massive expenses and its deep cuts in popular programs. Having been forced to sail in a fractured republican party to pass the bill through the congress, guaranteeing a clear victory against a foreign government on an unpopular technological tax provides the administration with a precious positive impulse.

The confrontation was focused on the digital services tax of Canada. The measure imposes a 3% tax on Canadian income from large digital companies, such as Amazon, Google and Meta. The tax has been in force since last year, but the first payments are due this Monday, June 30.

“The collection of June 30, 2025 will be interrupted,” said Champagne in his declaration.

The tax was a major point of discord. Although Canada is not the only country to implement such a measure, joining countries like France, Italy and the United Kingdom, the American government considers these taxes as unjustly targeting American companies. In recent weeks, a coalition of groups of Canadian and American companies, as well as American technology industry and elected officials, had signed letters calling on the Canadian government to repeal or suspend the tax.

Prime Minister Mark Carney sought to supervise the decision as a step towards a broader and more beneficial agreement. “In our negotiations on a new economic and security relationship between Canada and the United States, the new Government of Canada will always be guided by the overall contribution of any possible agreement to the interests of Canadian workers and businesses,” said Carney.