Washington: U.S. President Donald Trump announced the immediate termination of all trade discussions with Canada in response to Ottawa's decision to impose a digital services tax targeting American tech companies.
According to Yemen News Agency, President Trump described Canada's digital services tax as a "direct and brazen attack on the United States" in a post on the social media platform "Truth Social" on Friday. He declared, "Based on this outrageous tax, we are hereby ending all trade discussions with Canada, effective immediately." Furthermore, Trump mentioned that Canada would be informed about the tariffs they would face within the next seven days.
The U.S. president elaborated on the issue by pointing out that Canada has been a challenging trade partner, particularly with its high tariffs on American dairy products. He noted, "We have just been informed that Canada a country that has been very difficult to trade with, especially as it has imposed tariffs of up to 400% on our dairy farmers for years has announced it will impose a digital services tax targeting American tech companies. This is a direct and blatant assault on our country." He also accused Canada of emulating the European Union's approach to digital service taxation.
Previously, Canadian Prime Minister Mark Carney had announced plans to work towards a new economic and security agreement with the United States within 30 days. The announcement followed a meeting between the two leaders at the G7 Summit in Alberta, where trade issues were a central topic. A statement from the Canadian Prime Minister's Office highlighted ongoing negotiations for a new economic and security relationship between the two nations.
The total value of U.S. goods trade with Canada reached approximately $762 billion in 2024, according to the Office of the U.S. Trade Representative. As tensions rise, Trump has also escalated threats to increase tariffs on certain countries, with a deadline set for July 9.
During a White House press conference, Trump remarked that negotiations with major partners might extend beyond early July. However, he is considering higher tariff rates for smaller economies that have not reached agreements with the United States. "At some point in the next week and a half, or maybe sooner, we will send a message," he stated. "We have spoken with many countries, and we will simply inform them of what they must pay to do business with the United States."