Washington, 30 June 2025 (dpa/MIA) – Canada has decided to rescind its digital services tax (DST) on US tech companies and will resume its trade talks with the United States, Canada's Finance Ministry said in a statement on Sunday.

Canadian Prime Minister Mark Carney and US President Donald Trump have agreed to resume negotiations and are hoping to get an agreement by July 21, the statement said.

Canada decided to withdraw the DST "in anticipation of a mutually beneficial comprehensive trade arrangement with the United States," the statement added.

On Friday Trump called off his trade talks with Canada after sharply criticizing the tax, saying it was a direct attack by Canada on the US. He accused Ottawa of copying the European Union, which had implemented a similar measure. Trump noted that discussions with the EU on this issue were ongoing.

The US is by far Canada’s most important trading partner.

Canadian Finance Minister François-Philippe Champagne said that the suspension of the planned DST would allow significant progress in negotiations on a new economic and security relationship with the US.

The DST was announced in 2020 because many large technology firms operating in Canada might not otherwise by paying Canadian taxes on revenues generated from Canadians, the statement said.

But it added that Ottawa has always preferred "a multilateral agreement" on the tax.

MIA file photo