US-Canada trade talks are poised to resume following Canada's decision to withdraw a controversial digital services tax aimed at US tech giants. Initially announced in 2020, the DST would have imposed a 3% levy on revenue from Canadian users. This move faced backlash from the US, which claimed the tax was an attack on American companies. With trade negotiations expected to lead to an agreement by July 21, Canada emphasizes its desire for a multilateral solution to digital taxation issues, fueling hopes for improved trade relations with the US, their largest trading partner.
Canada's preference has always been a multilateral agreement related to digital services taxation. The withdrawal of the DST comes in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.
Originally announced in 2020, the DST had foreseen a 3% levy on revenue earned from Canadian digital services users and would have impacted US companies such as Amazon, Meta and Apple.
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