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 will rescind a tax on big US technology firms, just hours before first payments were due, 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 president said he would cease negotiations and impose new tariffs because of Canada’s imminent, new digital services taxes.