Canada has halted the implementation of its digital services tax, which targeted American tech giants, just hours before it was set to start. This pause is intended to revive stalled trade talks with the US, after President Trump's threats of retaliatory tariffs. The move indicates Canada's compromise to ensure negotiations can continue smoothly, highlighting a commitment to reach a new bilateral trade agreement by July 21. While Ottawa views the digital tax as a fair response to profit imbalances, Washington opposes unilateral measures, favoring multilateral reforms instead.
The sudden decision to pause Canada's digital services tax is a strategic compromise designed to revive trade negotiations with the United States and defuse tensions.
Canada's finance ministry stated that the delay was made "in good faith to ensure the smooth continuation of trade talks and avoid escalating tensions" between the two nations.
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