The White House said Monday that Canada "caved" to President Donald Trump by hastily rescinding the country's digital service tax after the president threatened to close trade negotiations between the two nations, CNBC reported.
The administration's top economic aides warned that the move sets a precedent for other countries considering similar taxes on American tech companies, and they promised to press the issue in ongoing trade talks.
White House press secretary Karoline Leavitt told reporters in a briefing that "It's very simple: Prime Minister [Mark] Carney and Canada caved to President Trump and the United States of America," adding that Canada reversed course at the last minute.
"It was a mistake for Canada to vow to implement that tax that would have hurt our tech companies," she said.
Leavitt added that Carney called Trump on Sunday night "to let the president know that he would be dropping that tax, which is a big victory for our tech companies and our American workers."
Leavitt's remarks followed comments by Kevin Hassett, director of the National Economic Council, who said on CNBC's "Squawk on the Street" that the administration will likely ask other countries to abandon their digital service taxes.
"My expectation is that the digital services taxes around the world will be taken off, and that that will be a key part of the … ongoing trade negotiations that we have," Hassett said.
Canada walked back its DST late Sunday to "advance broader trade negotiations" with the U.S., just hours before the first collection under the new tax was due.
Trump had warned Friday that he would terminate all talks with Canada if the DST remained in place. Canada said negotiations with the U.S. have since resumed, and both sides aim to strike a trade deal by July 21, according to a Department of Finance statement.
"I'm very pleased to see that Canada is removing its DST, which means that we didn't have to put in this really complicated retaliation to the tax code," Hassett said Monday. "But you could expect that countries that have digital sales taxes of the future are going to be facing the wrath of [U.S. Trade Representative] Jamieson Greer over these unfair trade practices."
In just over a week, the administration's steep tariffs on imports from several countries are set to take effect.
Hassett said the U.S. has "frameworks" for numerous deals that will be agreed to shortly after Congress passes the Big Beautiful Bill. If the legislation reaches Trump's desk by Friday, he predicted a "marathon session" in the Oval Office to finalize tariff rates and to decide whether to stick with the July 8 and July 9 deadlines.
"We can do whatever we want," Trump said Friday when asked about the tariffs.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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