Canadian Prime Minister Mark Carney said on Sunday that trade talks with the US are back on. This comes after Canada dropped its planned tax on big US tech firms.

The tax, known as the Digital Services Tax, was scheduled to take effect on Monday. It would have hit companies like Amazon, Google, Meta, Uber, and Airbnb with a 3% tax on their revenue from Canadian users. Retroactively, it would have cost US firms about USD 2 billion.

US President Donald Trump had paused trade talks on Friday, calling the tax a “direct and blatant attack” on the US. In response, Canada agreed to cancel the tax to help restart talks.

Both leaders now aim to reach a deal by 21st July, 2025. This is a timeline discussed earlier this month during the G7 Summit in Alberta. Trump and Carney had also met earlier this year to set a 30-day deadline for progress.

Canada’s Finance Minister said removing the tax will help facilitate talks on a new economic and security deal with the US.

The two countries are also negotiating the removal of heavy US tariffs. These include a 50% tax on steel, a 25% tax on autos, and a 10% tax on general imports. Trump introduced these tariffs as part of broader trade and border security moves since starting his second term in January.

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