President Donald Trump announced Friday that the United States is immediately terminating all trade discussions with Canada, citing what he called a “direct and blatant attack” on American technology companies through a newly announced Canadian digital services tax.
In a post on Truth Social, Trump blasted Canada as a “very difficult Country to TRADE with,” referencing years of high tariffs — “as much as 400%” — imposed on U.S. dairy exports. The former U.S. President and current 2025 Commander‑in‑Chief accused Ottawa of mimicking the European Union, which has also proposed a similar tax targeting major American tech firms.
The new Canadian tax, reportedly similar to Europe’s Digital Services Tax, is designed to impose a 3% levy on digital revenue from large multinational tech companies operating in Canada.
The Office of the U.S. Trade Representative and the White House have not immediately responded to requests for clarification regarding the scope of the terminated trade talks or details of the forthcoming tariffs to be imposed on Canadian imports.
Canada’s Department of Finance has not yet issued a formal response. The newly elected government under Prime Minister Mark Carney, who took office on March 14, 2025, has defended the digital tax as a fairness measure to ensure tech giants pay their share for revenue generated from Canadian users.
This decision marks the most significant escalation in U.S.–Canada trade tensions since Trump imposed steel and aluminum tariffs during his first term, and comes at a time when global digital tax policies are under heated negotiation at the OECD and G7 levels.
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