Did Canada crack under Trump’s pressure?

U.S. President Donald Trump had announced that he would break off all trade negotiations with Canada, in addition to threatening to impose new tariffs if his Canadian counterpart did not remove Ottawa’s tax on digital services.

In a statement released Sunday evening, Premier Mark Carney said that suspending the tax would help meet the deadline for reaching a tariff agreement, which is July 21, 2025. This deadline was set earlier this month at the G7 Summit in Kananaskis.

This 3% tax on revenues generated in Canada primarily targeted the GAFAMs – Google, Apple, Meta (formerly Facebook), Amazon and Microsoft. It was introduced a year ago, but digital companies were not required to pay it for the first time until June 30.

It targeted technology giants with annual worldwide sales in excess of $1.1 billion, and annual revenues in Canada in excess of $20 million.

According to estimates by business groups, the tax would entail annual costs of over $2 billion for US companies such as Amazon, Apple and Google, reports BBC.

The measure, which Trump called a direct and blatant attack against his country, was expected to bring Canada $7 billion over five years.