On Friday, Trump announced that he would end all trade negotiations with Canada and impose a new tariff rate on it, as Canada vowed to maintain the digital services tax. Trump said the tax was “a direct and blatant attack on our Country,” in a social media post.

By Sunday evening, the Canadian government rescinded the tax, which went into effect this month, “in anticipation of a mutually beneficial comprehensive trade arrangement” with the United States.

Canada would have likely collected billions of dollars in revenue by imposing a 3% tax on U.S. companies’ revenue above $20 million that provide digital services to Canadian users.

“It was a mistake for Canada to vow to implement that tax that would have hurt our tech companies here in the United States,” Leavitt continued. “The president made his position quite clear to the prime minister, and the prime minister called the president last night to let the president know that he would be dropping that tax, which is a big victory for our tax companies and our American workers here at home.”

CANADA CAVES TO TRUMP ON DIGITAL SERVICES TAX AS COUNTRIES SET TO RESUME TRADE TALKS

The U.S. and Canada are hoping to negotiate a new trade deal by July 21.

Earlier this year, Trump began trade battles by hitting Canada and Mexico with a 25% tariff before his “Liberation Day” ceremony.