The United States will restart trade negotiations with Canada immediately, after Canada scrapped its tax targeting large technology firms, White House economic adviser Kevin Hassett said on Monday.
 
"Absolutely," Hassett said on Fox News when asked about the talks restarting. U.S. President Donald Trump had asked the Canadians to take the tax off at the G7 meeting in Canada, he said.

"It's something that they've studied, now they've agreed to. And for sure, that means that we can get back to the negotiations."

Trump said Friday he was ending all U.S. trade discussions with Canada because of the digital services tax (DST), which would have seen companies like Amazon, Google, Meta, Uber and Airbnb pay three per cent on revenues from Canadian users.

With tax collection set to begin Monday, the policy would have left U.S. companies with a $2-billion US retroactive bill due at the end of the month.

Canada and the U.S. have been locked in talks for months to get Trump to lift his punishing tariffs on Canadian goods, with the U.S. president and Prime Minister Mark Carney agreeing at the recent G7 summit to reach some sort of deal on the trade dispute within 30 days — by July 21.

The Prime Minister's Office (PMO) confirmed to CBC News that Carney and Trump spoke on the phone sometime between Friday and Sunday night, when Canada rescinded the tax.

Despite the move, Canada is still in active discussions with G7 allies to introduce an international tax, with Finance Minister François-Philippe Champagne leading that work, the PMO said.

"President Trump has once again leveraged the power of the American economy, the best and biggest in the world, to deliver a victory for American industries and workers," White House spokesperson Kush Desai said in a statement to CBC News on Monday.

WATCH | Lutnick thanks Canada: 

U.S. commerce secretary thanks Canada for removing 'deal breaker' digital tax

In a social media post, U.S. Commerce Secretary Howard Lutnick thanked Canada for rescinding the Digital Services Tax on American tech companies, saying such a tax was a 'deal breaker for any trade deal with America.'

U.S. Commerce Secretary Howard Lutnick shared a statement on social media on Monday morning praising Canada's decision to scrap the tax. 

"Thank you Canada for removing your digital services tax, which was intended to stifle American innovation and would have been a deal-breaker for any trade deal with America," he wrote on X.

Conservative Leader Pierre Poilievre said on social media Monday that Carney put his "elbows down" by cancelling the tax "at the 11th hour."

He said that the prime minister should insist the U.S. immediately rescind softwood lumber tariffs in exchange. 

"We need to make gains for our workers in these talks," Poilievre said on X.