President Donald Trump announced Friday that he is halting all trade negotiations with Canada "effective immediately," following Canada's decision to impose a digital services tax targeting large tech firms.
In a post on Truth Social, Trump said the U.S. would inform Canada of new tariff rates within the coming week. The move comes just days after Trump met with Canadian Prime Minister Mark Carney at the G7 summit held in Alberta.
"We have just been informed that Canada—a country notoriously difficult to trade with, particularly given its long-standing tariffs of up to 400% on our dairy exports—has now introduced a Digital Services Tax targeting our American tech companies," Trump wrote. "This is a direct and blatant attack on the United States. They are clearly following the European Union, which has enacted similar measures and is also in negotiations with us. In response to this outrageous tax, we are terminating all trade discussions with Canada immediately."
The Canadian digital services tax, introduced last year, applies a 3% levy on revenue earned from Canadian users by large technology firms, both foreign and domestic. U.S.-based companies such as Amazon, Alphabet (Google's parent company), Meta, and Uber are expected to be among the hardest hit. According to the Associated Press, the retroactive nature of the tax could cost American companies roughly $2 billion, with payment due by the end of June.
Trump’s Truth Social post followed remarks at a White House press conference, where he stated that he plans to notify several countries engaged in difficult trade talks of their upcoming tariff rates.
Canada remains one of the United States’ top trading partners. The U.S. currently imposes tariffs on a wide range of Canadian imports, while Canada has responded with its own tariffs on American goods.
Prime Minister Carney responded by emphasizing the complexity of the trade discussions, saying, “We will continue to conduct these negotiations in the best interests of Canadians. It’s a negotiation.”
Canadian Chamber of Commerce President and CEO Candace Laing commented that such developments are part of the negotiation process. “Talks have their ups and downs. With deadlines approaching, it’s not unusual to see some last-minute surprises,” she said. “That said, the tone of discussions has improved recently, and we’re hopeful that progress will continue.”
