President Donald Trump has abruptly terminated trade negotiations with Canada, citing what he calls a “direct and blatant attack” on American technology companies through a newly imposed digital services tax. The dramatic move comes as a shock to diplomatic circles, considering Canada ranks among America’s most important trading partners.
The dispute centers on Canada’s digital services tax that will require major US tech giants including Alphabet, Amazon, and Meta to pay an estimated $3 billion starting Monday. Trump characterized this tax as an unfair burden on American businesses, drawing parallels to similar measures implemented by the European Union.
The breakdown in talks represents a significant reversal from earlier diplomatic progress. Just weeks ago at the G7 summit in Alberta, Canadian Prime Minister Mark Carney had secured Trump’s agreement to pursue a comprehensive trade deal within 30 days. That timeline now appears completely derailed.
In a fiery Truth Social post, Trump accused Canada of being “a very difficult Country to TRADE with” and referenced longstanding grievances about dairy tariffs of up to 400% imposed on American farmers. He warned that Canada would face retaliatory tariffs within seven days, signaling an escalation in trade tensions between the neighboring nations.