“A big victory” for U.S. tech companies as Carney “caved to President Trump,” says White House

WHITE House Press Secretary Karoline Leavitt told reporters on Monday that Prime Minister Mark Carney “caved” to U.S. President Donald Trump and informed him that he would be dropping the digital services tax (DST) on foreign tech companies.

She said this was “a big victory for our tech companies and our American workers here at home.”

Leavitt said: “Trump knows how to negotiate and he knows that he is governing the best country and the best economy in this world … and every country on the planet needs to have good trade relationships with the United States, and it was a mistake for Canada to vow to implement that tax that would’ve hurt our tech companies here in the United States.”

She added: “The president made his position quite clear to the Prime Minister and the Prime Minister called the president last night to let the president know that he would be dropping that tax.”

Finance Minister François-Philippe Champagne, announced that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the U.S. Consistent with this action, Carney and Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, the finance ministry said.

It added: “The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians. Canada’s preference has always been a multilateral agreement related to digital services taxation. While Canada was working with international partners, including the United States, on a multilateral agreement that would replace national digital services taxes, the DST was enacted to address the aforementioned taxation gap.”

It said that the June 30, 2025 collection will be halted, and Champagne will soon bring forward legislation to rescind the Digital Services Tax Act.

Carney said: ““In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses. Today’s announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit in Kananaskis.”

Last Friday (June 27) Trump had announced in a post on Truth Social that the U.S. was “terminating ALL discussions on Trade with Canada, effective immediately.”

He added: “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

Trump called Canada’s digital services tax on technology companies a “direct and blatant attack on our country.”

He added: “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”

NDP Leader Don Davies on Monday slammed the Liberals, noting: “Negotiating with Donald Trump is not easy – that’s clear. But rescinding the digital services tax is pure caving in to Trump and his billionaire friends.

“Canada is a sovereign country with the right to make our own tax laws. Abandoning fair taxation of tech giants is unacceptable appeasement.”

He said: “Added to the Liberals’ concessions on the Golden Dome, the NATO 5 per cent commitment, and Bill C-2’s violations of Canadians’ privacy rights, it’s looking more and more like Mr. Carney had his elbows up during the pre-game skate—only to drop them once the game started.”

 

 

 

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