The White House on Monday said the United States will restart trade talks with Canada following Ottawa’s decision to drop its digital services tax on US tech companies.
“Absolutely,” Fox News quoted White House economic adviser Kevin Hassett as saying on Monday when asked about the status of the talks.
According to a Reuters report, citing White House officials, US President Donald Trump had urged Canada to drop its planned digital services tax during a G7 meeting earlier in June.
“It’s something they’ve studied, now they’ve agreed to, and for sure, that means we can get back to the negotiations,” Trump was quoted as saying.
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The White House said PM Carney had “caved” to President Trump, after Canada dropped a tax on US tech firms that prompted Trump to call off trade talks.
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“It’s very simple. Prime Minister Carney and Canada caved to President Trump and the United States of America,” AFP quoted Press Secretary Karoline Leavitt as saying in a daily briefing.
Leavitt said Trump “knows how to negotiate,” adding that “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 have hurt our tech companies here in the United States,” she added.
Canada suspended the rollout of the tax, set to take effect Monday, just hours before it was due to begin, aiming to revive stalled trade talks with the US.
Late Sunday, Canada’s finance ministry announced that Prime Minister Mark Carney and President Trump would resume negotiations, with the goal of reaching a deal by July 21.
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Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America. https://t.co/b944wQ4cyn
— Howard Lutnick (@howardlutnick) June 30, 2025
“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” US Commerce Secretary Howard Lutnick responded in a post on X.
On Monday, Wall Street opened higher, with stocks hitting record levels as investor optimism grew around US trade negotiations with key partners, including Canada.
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US Treasury Secretary Scott Bessent voiced confidence in the possibility of “a flurry” of trade deals before a July 9 deadline. After that date, 10% tariff rates on imports from many countries are set to revert to President Trump’s previously announced levels of 11% to 50%.
Speaking to Bloomberg Television, Bessent cautioned that no automatic extensions would be granted, even for countries negotiating in good faith.
“Any extensions would be up to President Trump,” he was quoted as saying.
Tensions with Canada escalated last week after Trump abruptly halted trade talks, calling Ottawa’s proposed digital services tax a “blatant attack.”
On Sunday, he doubled down, vowing to impose new tariffs on Canadian goods within the week, threatening to upend recent stability in US-Canada trade ties.
“We have countries that are negotiating in good faith, but they should be aware that if we can’t get across the line because they are being recalcitrant, then we could spring back to the April 2 levels,” Reuters quoted Bessent as saying.
“I hope that won’t have to happen,” he added.
Trump and Canadian Prime Minister Mark Carney met at the G7 summit, agreeing to finalize a new economic deal within 30 days.
Canada’s proposed 3% digital services tax—retroactive to 2022—targeted revenue from Canadian users exceeding $20 million annually, affecting major U.S. tech firms like Amazon, Meta, Google, and Apple.
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The tax, set to take effect Monday, has been halted. Canada’s finance ministry said Finance Minister François-Philippe Champagne will introduce legislation to repeal the Digi