The United States resumed trade negotiations with Canada on Monday morning, after the Federal Government discarded its tax aimed at large technology companies.
Prime Minister Mark Carney said he spoke with the president of the United States, Donald Trump, by phone on Sunday night. He said they decided to continue with the negotiations, with the deadline previously agreed on July 21 that still took into account.
Carney said that the decision to eliminate the digital services tax (DST) “is part of a larger negotiation” with the United States.
“It is something we expected, in the broadest sense, that it would be part of a broader agreement,” Carney told journalists on Monday afternoon.
He said that “it makes no sense” to raise the tax now and have to send it to a later date.
Prime Minister Mark Carney says he had a “good” conversation with the president of the United States, Donald Trump, on Sunday, and that the two leaders will continue working to reach an agreement before July 21. The Federal Government rejected the digital services tax over the weekend after Trump stopped all commercial conversations.
The White House Press Secretary Karoline Leavitt said the prime minister “ceded” to Trump.
“President Trump knows how to negotiate,” Leavitt said. “It was a mistake that Canada promised to implement that tax that would have harmed our technology companies here in the United States.”
Trump said Friday that he was finishing all the commercial discussions of the United States with Canada due to the DST, which would have seen companies such as Amazon, Google, Meta, Uber and Airbnb pay three percent in the income of Canadian users.
With the collection of taxes that will begin on Monday, the policy would have left US companies with an American retroactive bill of $ 2 billion to the end of the month.
Despite the movement, Canada is still in active discussions with the allies of G7 to introduce an international tax, with Finance Minister François-Philippe Champagne leading that work, the PMO said.
In response to a journalist’s question about commercial conversations with Canada, the White House Press Secretary Karoline Leavitt said that Prime Minister Mark Carney “gave” the president of the United States, Donald Trump, after the latter said on Friday that he was finishing discussions due to digital services tax. The Canadian government announced Sunday night that it would terminate the tax.
The United States ambassador to Canada Pete Hoekstra told CBC Power and politics that the DST was a “red line” for the United States
The tax caused Canada “to move from the front of the line to the back of the line” in the Trump negotiations with the countries, but that Canada is now “at the front of the line,” he said.
Hoekstra said he spoke with officials from both countries during the weekend to meet the deadline of July 21.
“I think both parties are optimistic that they can reach an agreement within that period of time,” he said. “There is always something that can divert it, but both want to reach an agreement.”
The Secretary of Commerce of the United States, Howard Lutnick, shared a statement on social networks on Monday morning praising Canada’s decision to discard the tax.
“Thanks to Canada for eliminating its digital services tax, which was intended to suffocate US innovation and would have been a decisive factor for any commercial agreement with the United States,” he wrote in X.
Two days ago, the finance minister insisted that the Digital Services Tax would continue. Then, the prime minister lowered his elbows and canceled the tax at the 11th hour.
The tax has gone forever. In return, the prime minister must insist that the United States …
Conservative leader Pierre Poilievre said on social networks on Monday that Carney fell his “elbows” canceling the tax “at the 11th hour.
He said that the prime minister should insist that the United States immediately terminates soft wood tariffs in return.
“We need to make profits for our workers in these conversations,” Pailievre said in X.
