What to Know About the Digital Services Tax That Sparked US-Canada Standoff

The tax is a 3 percent tax on revenue from any digital services provided to Canadian users.

Canadian Prime Minister Mark Carney (L) greets U.S. President Donald Trump at the G7 Summit in Kananaskis, Alberta, Canada, on June 16, 2025. Brendan Smialowski/AFP

Digital services taxes caused a major conflict between the United States and Canada just days ago, ending with the Canadian government rescinding them to continue trade talks with the United States.

President Donald Trump on June 27 announced he was ending trade negotiations with Canada over its digital services tax (DST), which impacts Americans.