White House expects more countries will drop digital services taxes after Canada backs down

• The White House said it will likely ask more countries to drop their digital services taxes as part of ongoing trade talks with the Trump administration.
• The remark from National Economic Council director Kevin Hassett came shortly after Canada rescinded its DST.
• President Donald Trump had threatened to cut off all trade talks with Ottawa in retaliation for the tax.

The White House will likely ask more countries to drop their digital services taxes as part of ongoing trade talks, a senior Trump administration official said Monday after Canada rescinded its DST over the weekend.

“My expectation is that the digital services taxes around the world will be taken off, and that that will be a key part of the ... ongoing trade negotiations that we have,” National Economic Council director Kevin Hassett said on CNBC's “Squawk on the Street.”

The remark from one of President Donald Trump's top advisors came the day after Canada walked back its DST in order to “advance broader trade negotiations” with the United States.

That reversal — just hours before the first collection under the new tax was due — came on the heels of Trump's surprise threat Friday to terminate all trade talks with Ottawa as long as the DST remained in place.

Negotiations with the U.S. have resumed, Canada said, since it scrapped the tax. Trump and Canadian Prime Minister Mark Carney now aim to strike a trade deal by July 21, according to a Sunday statement from the Department of Finance in Ottawa.

“I'm very pleased to see that Canada is removing its DST, which means that we didn't have to put in this really complicated retaliation to the tax code,” Hassett said Monday morning.

“But you could expect that countries that have digital sales taxes of the future are going to be facing the wrath of [U.S. Trade Representative] Jameson Greer” over “these unfair trade practices,” Hassett said.

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In a little over a week, the Trump administration faces multiple self-imposed trade deadlines, when steep U.S. tariffs on a number of countries are set to restart.

Hassett said he believes the U.S. has “frameworks” for “a whole number of deals” that will be agreed to shortly after a major Trump-backed budget bill is passed through Congress.

The Trump administration is eager for the GOP-controlled House and Senate to pass a final version of the massive tax-and-spending legislation and send it to the president's desk before Friday.

If that happens, Hassett predicted that there will be a “marathon session” in the Oval Office in which Trump and his aides will tick down a list of countries and make final calls on U.S. tariff rates for each.

It is unclear whether Trump will stick to the July 8 and 9 tariff deadlines. “We can do whatever we want,” he said when asked last week about whether he would stick with one of those dates.