Canada axes digital services tax in push to advance trade talks with U.S.

Canada is rescinding its digital services tax "to advance broader trade negotiations" with the U.S., the country's finance ministry announced Sunday.Why it matters: President Trump cited the tax on U.S. tech firms as he announced Friday he was ending trade talks with Canadian officials and would assign a tariff rate on goods from the country within the next week.Trump and Canadian Prime Minister Mark Carney have now "agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21," per a statement from Department of Finance Canada.Payments related to Canada's Digital Services Tax were due on Monday, but the statement said the collection would be halted and Finance Minister François-Philippe Champagne "will soon bring forward legislation to rescind the Digital Services Tax Act."What they're saying: "In our negotiations on a new economic and security relationship between Canada and the United States, Canada's new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses," Carney said in a statement.Trump said on Fox News' "Sunday Morning Futures" earlier in the day that U.S. officials would not negotiate with their Canadian counterparts on trade until "certain taxes" were dropped."People don't realize, Canada is very nasty to deal with," he said.Representatives for the Trump administration did not immediately respond to Axios' requests for comment on Sunday evening.Editor's note: This is a breaking news story. Please check back for updates.

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