Canada has canceled its digital services tax (DST) to entice the United States to return to the negotiating table for a long-awaited trade and defense deal.

The tax, which was due to take effect on Monday, would have applied a 3% levy on revenues earned within Canada by companies — from any country — whose services are digitally based and earn more than 20 million Canadian dollars ($14.7 million, €12.4 million) per year.

But the DST was the target on Friday of a now familiar missive from US President Donald Trump on his Truth Social platform. There, he labeled the tax as a "direct and blatant attack" on the US and set the clock ticking on new tariffs for his northern neighbor as he put trade negotiations on ice.

While DSTs from Canada and other nations avoid naming specific companies among their targets, there is an inescapable reality that such instruments catch a swathe of American companies in their nets — among them digital behemoths like Meta, Google, Amazon, Airbnb and Uber.

The tax's impact was compounded by its retroactive nature, capturing all revenues back to 2022, a boon that would have yielded more than $2 billion to Canada's finances.

Binning the tax on the day it came into effect has potentially prevented Canada from feeling the brunt of harsher Trump tariffs and the loss of a trade deal with a significant trading partner. At the very........

© Deutsche Welle