By Emeka Blast 
Canada abandoned its planned 3% Digital Services Tax (DST)—set to apply retroactively from 2022—just hours before it would have started collecting.
Canada abandoned its planned 3% Digital Services Tax (DST)—set to apply retroactively from 2022—just hours before it would have started collecting. The tax targeted revenues of large digital platforms like Apple, Google, Amazon, Meta, Uber, and Airbnb derived from Canadian users .
🎯 Why now
Trump’s outrage: President Trump labeled the DST “a direct and blatant attack on our country” and threatened to halt trade negotiations over it .
Strategic retreat: Canada reversed course to revive stalled trade talks with the U.S., including broader economic and security cooperation .
📅 Next steps
Trade negotiations resume: President Trump and PM Mark Carney agreed on a phone call late Sunday, with a goal to conclude a new trade deal by July 21, 2025 .
Legislative repeal: Ottawa plans to formally repeal the DST via legislation in the Canadian Parliament .
🧭 Implications
Win for U.S. tech: American tech giants avoid a projected US$2–3 billion annual tax burden .
Diplomatic signal: Highlights Canada’s willingness to adjust fiscal policies under U.S. pressure, attracting criticism from domestic observers for undermining sovereignty .
Broader context: This reversal is part of a larger trend where Trump uses economic leverage—tariffs, threats—to influence allied countries’ domestic policy, including similar pressure on the UK DST .
🧩 Bottom line
Canada’s DST rollback is a calculated move to restart trade negotiations and remove a contentious sticking point. For the U.S., it’s a clear victory in Trump’s zero‑tolerance approach to perceived threats against American industries. While a deal by mid‑July seems achievable, domestic critics in Canada are already questioning whether the government conceded too easily.
