Trump terminates trade talks with Canada, cites ‘egregious tariffs’ on US tech firms

US President Donald Trump said Friday that he had terminated all trade discussions with Canada, over what he called “egregious tariffs” on a digital services tax on American tech companies. In a post on Truth Social, Trump referred to Canada as “a very difficult country to trade with” and said that its levy on tech firms—the first payment for which is due Monday—“is a direct and blatant attack on our Country.”
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump wrote. “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.”

Canada is the second-largest trading partner of the United States. Currently, the US has a tariff rate of 25% applied to non-USMCA goods that are imported from Canada. That excludes energy products, on which Trump has applied a 10% tariff rate. Canada also bears much of the brunt of Trump’s 50% tax on steel and aluminum imports, as it is the largest foreign supplier of these materials to the US.

Last week Canada’s finance minister said that he would not delay implementation of a digital services tax even as US trade talks continue. Any firm that makes more than $15 million off of Canadian internet users is subject to a 3% tax on those revenues.

“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,” Trump said on his Truth Social platform. “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”

Trump’s announcement reignites the trade war between the two neighbours, ending a period of some cordial relations following the election of Mark Carney as Canadian prime minister.