White House says Canada's Carney 'caved' to Trump on tech tax

July 1, 2025

The White House has declared victory after Canadian Prime Minister Mark Carney agreed to rescind a 3% digital services tax on major US tech companies following pressure from President Donald Trump. The tax would have affected tech giants like Amazon, Meta, Google, and Apple on Canadian revenue above $20 million, potentially costing them over C$2 billion in its first year with retroactive charges dating back to January 2022. After Trump called off trade talks and threatened tariffs, Canada halted collection of payments due Monday and promised to introduce legislation to eliminate the tax entirely.

Who is affected

US tech giants including Amazon, Meta, Google, and Apple
Canadian government (losing estimated C$5.9 billion in tax revenue over five years)
American tech companies and workers (benefiting from tax removal)
Canadian taxpayers and citizens (affected by loss of government revenue)
Consumers of digital services in Canada

What action is being taken

Canada is halting collection of the digital services tax payments
Canada is introducing legislation to completely scrap the tax
Trade negotiations between the US and Canada are resuming
The White House is publicly declaring victory in the trade dispute
Canada's Finance Minister is issuing statements explaining the tax reversal

Why it matters

The tax would have generated an estimated C$5.9 billion for Canada over five years
The dispute represents an early trade conflict between Trump's administration and Canada
The resolution demonstrates Trump's negotiating approach with allies
The situation highlights the challenges of taxing multinational tech companies
The tax reversal could impact future international digital taxation efforts
The incident has political implications in Canada, with opposition criticism of the government's handling of the situation

What's next

No explicit next steps stated in the article

Read full article from source: BBC