Trade Triumph: Averting the Digital Services Tax Crisis

Canada has halted its planned digital services tax targeting U.S. tech firms after pressure from President Trump, paving the way for renewed trade negotiations. The move aims to finalize a new economic agreement by July 21, amid looming 10% U.S. tariff rates and political tensions.

The United States has agreed to restart trade talks with Canada after Ottawa agreed to remove its digital services tax, aimed at American tech companies. The decision, announced by White House economic adviser Kevin Hassett, was made after President Trump raised the issue at a recent G7 meeting in Canada.

Canada's plan to implement the digital tax, set to affect major U.S. technology firms, was halted just hours before it was due to start. This step was taken to break the deadlock in ongoing trade negotiations with the U.S. In appreciation, U.S. Commerce Secretary Howard Lutnick praised Canada for its decision.

The suspension of the tax has been viewed positively by financial markets, with Wall Street hitting record highs amidst growing optimism about trade negotiations with Canada. The discussions aim to reach a new economic agreement by July 21, as impending U.S. tariff increases loom on the horizon.

(With inputs from agencies.)