Canada has decided to abandon a proposed digital tax that could have generated billions in revenue, citing the need to ease trade tensions with U.S. President Donald Trump. The move is seen as a strategic attempt to avoid further escalation in their trade relationship, particularly with Trump’s known opposition to certain taxes on American companies.
Industry analysts suggest that this decision opens the door for Trump to consider similar levies on large technology firms, potentially impacting companies like Meta, Amazon, and Alphabet. The withdrawal of the tax highlights the ongoing influence of presidential policies on international trade agreements and digital taxation strategies.
Ministers from Canada’s federal government emphasized that the decision reflects a broader commitment to maintaining stable trade relations with the United States, even at the cost of forgoing potential revenue. The move is expected to be closely monitored by global markets, which may react to the possibility of new U.S. tax measures on tech giants.