In a sharp escalation of trade tensions, President Donald Trump announced the immediate suspension of all trade negotiations with Canada, following that country’s implementation of a digital services tax targeting major tech companies. The move comes just days after Trump met with Canadian Prime Minister Mark Carney at the G7 economic summit in Alberta.
In a statement posted Friday on Truth Social, Trump criticized Canada’s policy and promised retaliatory action.
“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, 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,” the president wrote. “They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”
Trump further stated that the U.S. will notify Canada of its new tariff rate within the next week, signaling a potentially broader trade confrontation.
Canada’s digital services tax, which officially took effect last year, imposes a 3% levy on revenues earned by large tech platforms from Canadian users. The tax affects both foreign and domestic firms, including Amazon, Alphabet (Google’s parent company), Meta, and Uber. According to the Associated Press, the retroactive application of the tax could cost U.S. companies an estimated $2 billion, with payments due by the end of June.
Shortly before his Truth Social post, Trump also addressed reporters during a White House press conference, revealing his intention to send formal notices to countries where trade talks are faltering. These letters will outline proposed tariff rates from the United States.
Canada remains one of the United States’ largest trading partners. However, trade relations have frequently been strained by reciprocal tariffs. The U.S. has placed duties on various Canadian imports, while Canada has imposed retaliatory tariffs on several U.S. goods entering its market.
