Trump Ends Trade Talks with Canada in Response to Digital Services Tax on U.S. Tech Firms
In a dramatic turn, U.S. President Donald Trump announced on Friday that the United States would immediately terminate all ongoing trade negotiations with Canada, citing Ottawa’s decision to implement a digital services tax targeting American technology companies.
“Canada has just announced that they are putting a digital services tax on American technology companies, which is a direct and blatant attack on the United States,” Trump wrote in a post on social media.
“Based on this egregious tax, we are hereby terminating ALL discussions on trade with Canada, effective immediately,” he added.
Trump also stated that the United States would notify Canada of new U.S. tariffs on Canadian businesses within the next seven days. He criticized Canada’s move as an imitation of the European Union’s digital tax strategy, which he has repeatedly opposed.
The announcement comes as Washington races to finalize trade agreements with multiple countries ahead of a self-imposed deadline of July 9. However, White House Press Secretary Karoline Leavitt noted Thursday that President Trump retains the option to extend that timeline if necessary.
This latest move marks a significant escalation in tensions between the two neighboring countries. In May 2025, Canadian Prime Minister Mark Carney visited the White House, describing his talks with President Trump as “wide-ranging and constructive,” despite ongoing disagreements over tariff policies and Trump’s repeated references to Canada as a potential “51st state.”
Carney, addressing reporters after the meeting, dismissed the “51st state” remark as unhelpful. “I told the president it’s not useful to repeat that idea. But he’s going to say what he wants,” Carney said. “He understands we are two sovereign nations engaged in a negotiation.” The Canadian government has yet to formally respond to Trump’s announcement.
