Trump Pulls Plug on Canada Trade Negotiations Over Digital Tax Dispute

President Donald Trump has abruptly terminated trade discussions with Canada, citing the country’s new digital services tax on American technology companies as an unacceptable assault on U.S. interests. The decision marks a dramatic shift in relations between the two nations, which rank among each other’s largest trading partners.
The breakdown comes just weeks after Canadian Prime Minister Mark Carney met with Trump at the G7 summit in Alberta, where both leaders had expressed optimism about reaching a trade agreement within 30 days. However, Canada’s implementation of a digital tax targeting major U.S. tech firms appears to have derailed these promising negotiations.
The disputed tax will require American technology giants including Alphabet, Amazon, and Meta to pay an estimated $3 billion, with initial payments scheduled for Monday. Trump characterized this levy as a “direct and blatant attack” on the United States, drawing parallels to similar measures implemented by the European Union.
In a strongly worded statement on Truth Social, Trump announced the immediate termination of all trade discussions and warned that Canada would face retaliatory tariffs within seven days. The president also criticized Canada’s existing agricultural tariffs, particularly noting dairy product taxes of up to 400% that have long frustrated American farmers.