With a critical July 9 deadline approaching for U.S. tariff reinstatements, global trade dynamics are diverging sharply between North America and Europe. Canada has opted to scrap its contentious digital services tax (DST) to revive negotiations with Washington, while the European Union remains steadfast in refusing to compromise on its landmark tech regulations.
Canada's Strategic Retreat
Ottawa's decision to abandon its 3% levy on U.S. tech giants like Amazon and Google – originally set to take effect this week – has reopened diplomatic channels. White House National Economic Council Director Kevin Hassett confirmed trade talks would resume immediately, citing productive discussions between leaders at the recent G7 meeting. The tax withdrawal follows U.S. President Donald Trump's ultimatum to halt negotiations last Friday.
EU Digs In on Digital Sovereignty
In contrast, European Commission spokesperson Thomas Regnier declared the bloc's digital legislation "not on the table" during ongoing U.S. trade discussions. This includes the Digital Markets Act and Digital Services Act – regulations that recently led to major fines against Apple and Meta. Despite pressure from Washington, EU officials emphasize their rules apply equally to all foreign firms and cannot be negotiated bilaterally.
With European Commissioner Maros Sefcovic scheduled for last-minute talks in Washington on July 1, Bloomberg reports suggest potential compromises on sector-specific tariffs while maintaining core digital policies. The outcome could redefine transatlantic trade relations and set precedents for global tech governance.
