Canada has ditched its plan to implement its new digital services tax, which aimed to collect billions of dollars from American tech giants like Meta and Amazon, after President Trump said the tax led to him cutting off trade negotiations between the two countries.
The tax was scrapped by Canadian Prime Minister Mark Carney on Sunday following a discussion with the president, per The New York Times.
The new tax — which was a 3% tax on tech companies with more than $800 million in annual sales and targeted companies involved in social media services and online advertising — was set to go into effect on Monday; the initial payment to Canada from companies like Meta, the parent company of Facebook and Instagram, Amazon and Alphabet, was estimated to be a collective $3 billion.
That plan has gone out the window, at least for now, after President Trump ripped the DST as a “blatant attack” on U.S. tech companies. He then said on Friday he was “terminating ALL discussions on Trade” with Canada as a result of it going into effect on Monday.
Ending the tax right before it starts puts the U.S. and Canada on pace to complete a trade deal by July 21, a date both countries are aiming for, according to Carney.
“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,” Carney said in a Sunday statement.
Meta’s stock is up 1.60% in early trading on Monday, while Amazon’s is down 1.07% and Google parent company Alphabet’s stock is down 0.24%.
