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 government said on Sunday night that it would cancel its tax on American technology companies, handing a victory to the Trump administration.