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Canada withdraws digital services tax proposal to boost US trade talks

Source: US, Canada to resume trade talks after Ottawa drops digital tax (2025-07-01)

Canada has decided to rescind its proposed digital services tax, a move aimed at improving relations and advancing trade negotiations with the United States. The government announced the decision on June 30, 2025, citing the need to foster a more cooperative environment and avoid potential trade disputes with its southern neighbor. The tax, which targeted large digital companies, had faced criticism from the US, which argued it unfairly targeted American firms and risked violating international trade agreements. By withdrawing the proposal, Canada hopes to facilitate ongoing discussions with the US on digital taxation and broader trade issues, signaling a commitment to resolving disagreements through diplomacy.

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