Trump Ends Trade Talks with Canada Over Tech Tax Dispute

President Donald Trump announced on Friday that he has ended trade talks with Canada due to Canada's new tax on tech companies, including those from the U.S. Trump called Canada 'a very difficult country to trade with' and criticized the tax as a direct attack on the U.S.

Trump stated, 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.' He also mentioned that Canada will be informed of the tariff they will have to pay to do business with the U.S. within the next seven days.

Canada is the second-largest trading partner of the U.S. Currently, the U.S. imposes a 25% tariff on non-USMCA goods imported from Canada, excluding energy products which have a 10% tariff. Canada is also heavily affected by Trump's 50% tax on steel and aluminum imports, being the largest foreign supplier of these materials to the U.S.

The office of Canadian Prime Minister Mark Carney did not provide an immediate response to the announcement.

Last week, Canada's finance minister confirmed that the digital services tax would not be delayed despite ongoing U.S. trade talks. The tax applies a 3% levy on revenues exceeding $15 million made by tech companies from Canadian internet users, with payments retroactively starting from 2022 and due from June 30.