Canada blinks first in tech-tax standoff — Trade talks back on
|Ottawa just yanked the plug on its long-threatened digital services tax hours before it was set to hit the books, effectively throwing a bone to Trump and reopening the stalled trade channel. Call it what it is: a clean policy surrender to keep the bilateral show on the road.
The 3% DST was set to ding U.S. tech giants like Meta, Amazon, and Netflix—until Trump slammed it as a “blatant attack” and pulled the plug on trade talks in retaliation. By Sunday night, Champagne folded. Now it’s game on for a fresh deal by July 21, the date floated post-G7. Carney’s signaling full compliance to get the reset.
Trump's blunt-force diplomacy worked. Canada’s tax was projected to pull in over C$7bn over five years, but Ottawa clearly decided a bruised relationship with its largest trading partner wasn’t worth the revenue. The message is clear: poke the tariff bear, and you get scorched.
This is bullish for risk. USDCAD dipped. Reopening talks lifts a weight off broader North American sentiment. With India, Taiwan, Vietnam and China also in back-channel discussions, we’re seeing a synchronized unwind of the tariff war premium.
Markets love capitulation. Canada just gave them one. The path of least resistance stays up.
Stocks in Asia kicked off the week riding the global risk wave, with traders chasing headlines—not fundamentals—as progress across multiple trade fronts fuels a “buy the relief” rotation. The MSCI Asia-Pac index nudged higher, led by Japan’s Nikkei ripping over 1.6% after their top negotiator extended his stay in DC. That’s not just diplomatic optimism—it’s price action confirmation.
Futures followed suit. S&P up 0.4%, Nasdaq 100 up 0.5%.
Everyone’s suddenly rowing in the same direction—at least for now.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.