US terminating trade talks with Canada
US President Donald Trump has announced the termination of all trade talks with Canada in light of Ottawa's tax on digital services, which he called a 'adirect and blatant attack on our country.'
Relations between the neighbors began to sour when Trump imposed 25% tariffs on Canadian goods in February soon after taking office. Ottawa responded with reciprocal tariffs.
Trump later temporarily suspended the tariffs, expressing a willingness to negotiate individually favorable terms for US businesses with the countries that he had targeted for tariffs.
Trump has long accused Canada of taking unfair advantage of the US and has on several occasions suggested that it should become the 51st US state, arguing that Washington effectively subsidizes Canada's economy.
In a post on Truth Social on Friday, Trump stated that 'Canada, a very difficult Country to TRADE with… has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country.'
'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,' the US president proclaimed.
He added that his government would notify Ottawa of the 'Tariff that they will be paying to do business with the United States of America within the next seven day period.'
Later on Friday, Canadian Prime Minister Mark Carney told reporters that his country would 'continue to conduct these complex negotiations in the best interests of Canadians.' However, he noted that he had yet to speak with Trump about the issue.
Canada's digital services tax, enacted in June 2024, requires companies providing digital services in the country and earning more than CAD 20 million ($14.5 million) in revenue from Canadian sources to pay a 3% tax on their profits. The first payments are due on Monday. According to Canadian media, US tech giants such as Amazon, Apple, Airbnb, Google, Meta, and Uber are expected to pay approximately $2 billion by the end of July. The tax is retroactive to January 1, 2022.
In March, Carney described Trump's tariffs as 'unjustified' and stated that 'Canada will win' the trade war with the US. He vowed that Canada 'will never, ever, in any way, shape, or form, be part of the United States.'
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