Under the direct pressure of American President Donald Trump, Canada announced on Sunday the abandonment of its digital services tax (TSN), just a few hours before its entry into force. The President of the United States had suspended all trade discussions with Ottawa at the end of last week: this is a diplomatic victory for the American administration.
“Prime Minister Carney and Canada have given up against President Trump,” said White House spokesperson Karoline Leavitt on Monday at a press conference. “President Trump knows how to negotiate and knows that he governs the best country and the best economy on the planet. »»
A “scandalous” tax
Adopted in 2024, the Canadian TSN was to impose a 3 % levy on the income generated in the country by large digital platforms, especially the American giants that are Google, Apple, Meta, Amazon and Microsoft. Ottawa had announced that he wanted to apply it on Monday. “It was Canada’s mistake to want to apply this tax that would have affected our tech companies here in the United States,” added the White House spokesperson.
Donald Trump was wondering on Friday Truth Socialdenouncing a “scandalous tax” targeting American interests. “We put an end to all trade discussions with Canada, with immediate effect,” he also wrote, also threatening new punitive customs rights during the week. Faced with this escalation, Ottawa preferred to backtrack, confirming in the process the resumption of bilateral commercial negotiations.
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A precedent worrying for Europeans and Japan
The European Union, which already applies a form of digital tax in several member states, could be the next target. “All countries need to have good trade relations with the United States,” added Karoline Leavitt.
The American president also threatened Japan on Monday. “They don’t take our rice when they have a big shortage,” he said on Truth Socialbefore announcing the imminent shipment of an official letter, leaving the threat of new customs duties hovering. The United States plans to reactivate its hardest customs from July 9th from its hardware from several business partners. The Canadian decision could well strengthen the effectiveness of this offensive economic diplomacy.
