TORONTO — An about-face by Canada amid trade negotiations with the United States was welcomed Monday by the Trump administration as a victory.
But for the Canadian government, it may have just been a calculated tactical retreat.
On Friday, President Donald Trump said he was suspending trade talks because Canada was about to start collecting a tax on big U.S. technology companies, a levy that he has criticized as a “blatant attack.”
On Sunday evening, hours before that tax came into effect, the Canadian government announced it was scrapping it.
Prime Minister Mark Carney of Canada said the decision was meant to allow the resumption of trade talks with the United States.
“In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” he said in a statement.
On Monday morning, talks were back on, but the White House did not miss the opportunity to take a victory lap.
“It’s very simple: Prime Minister Carney and Canada caved to President Trump and the United States of America,” said Karoline Leavitt, the White House press secretary.
“President Trump knows how to negotiate, and he knows he is governing the best country and the best economy,” Leavitt added.
She said it had been a “mistake” for Canada to have pursued the tax, and called the decision to rescind it “a big victory for our tech companies and our American workers here at home.”
In the United States, digital services taxes imposed by other nations have been disliked by Republicans and Democrats because they are seen as unfairly targeting U.S. giants including Google, Apple and Amazon. The taxes target revenue that businesses earn from online advertising, the sale of user data and other services, even if the firm is headquartered elsewhere.
© 2025 The New York Times Company