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WASHINGTON — President Trump unexpectedly announced Friday that he was “terminating” trade talks with Canada due to a looming digital services tax targeting large American companies.
“We have just been informed that Canada … 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,” Trump wrote on Truth Social.
“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”
Trump added: “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. Thank you for your attention to this matter!”
Canada is moving forward with plans to slap a 3% tax on revenue generated by platforms like Facebook and Google — with looming tax bills made retroactive to 2022 and applicable to firms that rake in more than $14.6 million per year.
The immediate impact of Trump’s announcement was unclear — in part because much of the US-Canada relationship is governed by the USMCA trade deal.
The announcement did cause stock prices to drop on Wall Street, though the markets were still on course for a winning end to the week.
Trump previously threatened to slap a 50% duty on the European Union over its digital services tax, but delayed implementation until July 9 to allow time for negotiations.
