Canada is seeking to finalise a free trade deal with Southeast Asian nations as part of a push to expand into new markets, its top diplomat said, responding to the hefty tariffs imposed on it by the United States,

“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” Canadian Finance Minister François-Philippe Champagne said in a statement Sunday night.

Canada is expected to resume trade talks with the U.S. after the Canadian government said late Sunday it was rescinding a digital services tax on American tech companies.

Canada's trade deficit in May narrowed after a record-breaking deficit in April as total exports rose and imports fell even as the impact of U.S. tariffs dented shipments south of the border, data showed on Thursday.

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.

President Donald Trump announced a new set of duties on Canadian goods that were not covered by existing sectoral tariffs.

The federal government, industry, and provinces are seizing the crisis to try and build more stuff more quickly - "build, baby, build" in the words of our prime minister - under the premise that it will help reduce dependency on an increasingly unpredictable neighbour.

The Canadian dollar edged higher against its U.S. counterpart on Thursday but the move was modest as the greenback notched broad-based gains and after new U.S. trade tariffs cast doubt about prospects of a trade deal this month between Canada and the United States.