President Donald Trump terminated trade talks with Canada on Friday and will be announcing a tariff on Canadian goods in response to a Canadian tax on American tech goods.
Trump took to Truth Social, days after leaving the NATO Summit, where Canadian Prime Minister Mark Carney was also present, to announce he had been informed of Canada’s new “Digital Services Tax,” slamming it as an “attack” on America:
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. They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also.
Trump then shared he was ending trade talks with Canada, which had made some progress since the initial escalation with former Prime Minister Justin Trudeau, who retaliated against Trump’s initial tariffs on Canada. He also noted that Canada would be alerted to a new tariff in the next week.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. 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,” he wrote.
As CNBC noted:
The first payments from Canada’s digital services tax, which was enacted last year and applies retroactively to 2022, are set to be collected Monday. The tax would hit both domestic and foreign tech companies, including U.S. giants such as AmazonGoogle and Meta.
Canadian officials said this month that they would not pause the digital services tax, despite ferocious opposition from the United States.
Canadian goods that fall under the USMCA agreement are currently exempt from tariffs, while those that are not compliant are subject to a 25 percent tariff, as set forth in Trump’s April 2 or “Liberation Day” reciprocal worldwide tariffs. Non-compliant energy and potash face a ten percent tariff.
“We’ll continue to conduct these complex negotiations in the best interest of Canadians,” Carney said after the post on Friday, per Politico.
