White House says Canada’s Carney ‘caved’ to Trump on tech tax

The White House has said Canadian Prime Minister Mark Carney “caved” to pressure from President Donald Trump to rescind a tax on big US technology firms.

White House Press Secretary Karoline Leavitt told reporters that Canada had made a mistake in trying to levy the tax, and that Carney called Trump on Sunday evening to say he would drop it.

Carney told reporters in Ottawa that the digital services tax had been dropped as “part of a bigger negotiation” and that Canada and the US had resumed trade negotiations on Monday.

Labelling the tax a “blatant attack”, Trump had called off trade talks on Friday and threatened to raise tariffs.

Canada then said it would halt collection of payments, which were due on Monday, and introduce legislation to scrap the tax.

“It is something we expected, in the broader sense, that would be part of a broader deal,” Carney told reporters on Monday afternoon.

White House economic adviser Kevin Hassett confirmed that trade talks between Washington and Ottawa were back on.

Since Trump returned to office, the two North American neighbours have been fighting over trade.

In response to a question from a reporter on Monday, the White House press secretary said: “President Trump knows how to negotiate, and he knows he is governing the best country and the best economy in this world.

“Every country on the planet needs to have a good relationship with the US,” she said, and called removal of the tax a “big victory for our tech companies and our workers here at home”.

Canada’s digital services tax (DST) would have meant US tech giants including Amazon, Meta, Google and Apple faced a 3% charge on Canadian revenue above $20m (£15m).

On Sunday, Canadian Finance Minister François-Philippe Champagne issued a statement saying the tax would be rescinded.

“The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated