U.S. President Donald Trump has abruptly ended all trade discussions with Canada over a new Digital Services Tax that targets technology companies.
In a fiery statement posted on his social media platform Friday morning, U.S. President Donald Trump lashed out at Canada over its Digital Services Tax, accusing the Canadian government of targeting American tech giants and declaring an immediate halt to trade discussions.
“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,” Trump wrote. “This is a direct and blatant attack on our Country.”
The post, which appeared just after 9 a.m. Eastern, signaled a sharp escalation in economic tensions between two of the world’s largest trading partners. Trump said the move “copies” the European Union’s digital taxation approach and declared that Washington would respond swiftly.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”
The Canadian government has yet to issue a formal response. The Digital Services Tax Act received royal assent on June 20, 2024 and came into force on June 28, 2024. It aims to impose a levy on revenues earned by large tech firms operating in Canada, including American-based giants like Amazon, Google, Meta, and Apple.
The policy mirrors similar moves in France and the EU, where governments argue that big digital platforms have long avoided fair taxation by booking profits in low-tax jurisdictions.
But Trump Framed it as a “blatant attack,” he tied the dispute to long-standing complaints about Canadian dairy tariffs, a sore point since his first presidency.
While the digital tax itself was introduced last year, the abrupt suspension of trade talks and threat of retaliatory tariffs caught many observers off guard.
Canada is the United States’ second-largest trading partner after China. A full-blown trade war would likely send ripples through sectors ranging from agriculture and automotive to digital services and energy.
This is not the first time Trump has targeted Canada during his presidency. In 2018, he slapped tariffs on Canadian steel and aluminum and publicly called Prime Minister Justin Trudeau “weak” during tense NAFTA negotiations.
For now, all eyes are on Ottawa’s response, and on what Trump’s seven-day deadline might mean for North American trade.
About the Author
