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 has abruptly scrapped its plan to enforce a new digital service tax on American tech firms – days after President Trump blasted the “foolish” move as a “direct and blatant attack” on the United States.

But it wasn't just Trump pushing Carney to reconsider the tax. A nonprofit representing CEOs and leaders of some of Canada's biggest businesses, the Business Council of Canada, had warned that Carney defending the tax risked "undermining Canada’s economic relationship with its most important trading partner," Al Jazeera reported.