Just hours before Canada's new Digital Services Tax was set to go into effect, the Canadian government announced that it rescinded the levy “in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.

Canada’s decision to withdraw its digital services tax over President Donald Trump’s trade threats will likely embolden the president’s strategy of using tariffs to extract broader concessions from countries.

Canada scrapped its digital services tax targeting U.S. technology firms late on Sunday in a bid to advance stalled trade negotiations.