The United States will resume trade negotiations with Canada immediately after Ottawa scrapped its digital services tax targeting U.S. technology firms, White House economic adviser Kevin Hassett said on Monday.

Canada has scrapped a tax on big US technology firms, just hours before it was due to come into force, to allow trade talks between the two countries to restart. On Friday, US President Donald Trump called off negotiations over a trade deal, describing the tax as a "blatant attack", and threatened higher tariffs on imports from Canada.

The Canadian government said “in anticipation” of a trade deal “Canada would rescind” the Digital Serves Tax. The plan to tax U.S. technology firms was set to go into effect Monday.