Canada caves to Trump and rescinds its digital service tax on big tech

Canada has folded in its battle with US President Donald Trump over tariffs by cancelling its proposed digital services tax (DST) on big tech companies, the government announced. On Friday, Trump ended trade talks over the levy, which he called "a direct and blatant attack on our country." However, discussions have resumed now that the DST is gone, according to Canadian Prime Minister Mark Carney.

The DST has been in effect since last year but Canada was due to collect the first payments totalling around $2 billion on June 30. However, those will now be halted. "To support those negotiations, the Minister of Finance... announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States," the Department of Finance wrote yesterday.

With the DST, Canada planned to apply a three percent tax ...