Trump’s tariff threat pushes Canada to scrap digital services tax

In a sudden reversal, Canada has caved and will remove its digital services tax after trade talks with the US suddenly fell apart this weekend.

Blocked just hours before taking effect, the controversial digital services tax (DST) would have charged big US tech companies like Apple, Google, and Meta a 3 percent tax on all digital services revenue earned from Canadian users. Frustrating US tech giants, Canada also sought to collect retroactive taxes dating back to 2022.

Over the weekend, President Donald Trump claimed the tax was a "direct and blatant attack" on US tech companies and terminated the trade talks, while threatening to impose a new tariff rate on Canadian goods by July 4.

On Sunday, Canadian Prime Minister Mark Carney seemingly bowed to Trump's pressure campaign, abruptly doing an "about turn" after previously refusing to pause the DST despite Trump's opposition, NBC News reported.

But it ...