Buffalo, N.Y. (WBEN) - Canadian Prime Minister Mark Carney says trade talks with the United States have resumed after Canada rescinded its plan to tax U.S. technology firms.
The Canadian government said “in anticipation” of a trade deal, “Canada would rescind” the Digital Serves Tax. The tax was set to go into effect Monday.
President Donald Trump suspended trade talks with Canada because of the plans to tax technology firms, which he called “a direct and blatant attack on our country.”
"It's sort of like, just kidding!," said Jill Schlesinger, Financial Analyst and host of "Jill on Money". "I think there was a lot that Canada stood to lose, way more than the U.S. I think they recognized that they want to be tough. But when the talks got called off, because President Trump has absolutely no patience,
they had to walk it back and come back to the table."
Progress with Canada has been a roller coaster, starting with President Trump poking at the nation’s northern neighbor and repeatedly suggesting it would be absorbed as a U.S. state.
Canada and the U.S. have been discussing easing a series of steep tariffs Trump imposed on goods from America’s neighbor.
Trump has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. He is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after a 90-day negotiating period expires.
"The digital services tariff would have been a pretty big deal, if they started charging Google and Apple and Facebook and every electronic service," said Schlesinger. "But I think the U.S. has the upper hand in any of these relationships. When you look at tariffs overall, I think where we are now, with a 10% universal tariff, and a 30% tariff on China and the steel and aluminum tariff, that's what the market had projected back in January and the markets just reached a new closing high last week."