Topline
U.S. Futures rose early on Monday after the Canadian government scrapped its plan to implement a digital-services tax—which would have targeted major U.S. tech giants—in bid to salvage trade talks with the U.S. and placate President Donald Trump, who called the tax a “blatant attack” on the American economy and suspended ongoing trade talks.
Canadian Prime Minister Mark Carney’s office said he spoke with President Donald Trump on Sunday.
Key Facts
In a statement issued late on Sunday, the Canadian government said it would “rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.”
The decision to rescind the DST—which were set to go into effect on Monday—will have to be approved by Canada’s parliament, and the statement said the country’s Finance Minister François-Philippe Champagne will “soon bring forward legislation” to do so.
As the legislation moves through the parliament, the finance ministry has decided to halt DST collection starting Monday.
Canadian Prime Minister Mark Carney’s office told various outlets that he spoke with Trump on Sunday to discuss rescinding the tax, and both leaders intend to reach a trade agreement by July 21.
The president and the White House have not yet commented on Canada’s decision.
How Have U.s. Futures Reacted?
U.S. stock futures rose sharply early Monday amid revived hopes of a swift U.S.-Canada trade deal. The tech-heavy Nasdaq Futures index saw the biggest bump, rising 0.61% to 22,890 points. The benchmark S&P 500 Futures index climbed 0.41% to 6,249.25 points, while Dow Futures jumped 0.46% to 44,329 points. In the premarket, shares of Google were up nearly 1.5% to $180.90, while Meta surged 1.76% to $746.55. Amazon, Apple and Microsoft’s stock prices rose 0.7%, 0.63% and 0.5%, respectively, in early trading.
