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.

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Canada has rescinded its digital services tax in a bid to advance trade negotiations with the U.S., Canada's finance ministry said in a statement on Sunday. Canadian Prime Minister Mark Carney and U.S.