US-Canada Trade War Escalates: Trump Suspends Talks as Digital Tax Takes Effect Monday
US-Canada Trade War Escalates: Trump Suspends Talks as Digital Tax Takes Effect Monday
President Donald Trump announced Friday that the United States is immediately suspending all trade discussions with Canada. The abrupt decision comes in response to Canada’s firm stance on implementing its new digital services tax, which Trump labeled a “direct and blatant attack” on the U.S.
The controversial digital services tax is set to go into effect this Monday, June 30, imposing a 3% levy on revenue from Canadian users for companies including Amazon, Google, Meta, Uber, and Airbnb. This retroactive application is expected to result in a staggering $2 billion bill for U.S. tech giants due by the end of the month.
In a social media post, President Trump declared, “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.” He further warned that Canada would be notified of new U.S. tariffs within the next seven days.
This latest development marks a significant escalation in the trade tensions that have characterized Trump’s second term, which began in January. Despite a recent G7 summit in Alberta where a 30-day deadline for trade talks was reportedly set, the U.S. President has maintained a confrontational stance, asserting significant economic power over its northern neighbor.
Canadian Prime Minister Mark Carney responded to the announcement, stating his country would “continue to conduct these complex negotiations in the best interests of Canadians.” However, Trump remains insistent that Canada will ultimately remove the tax, adding, “It’s not going to work out well for Canada. They were foolish to do it.”
The Computer & Communications Industry Association (CCIA) has expressed support for the Administration’s move, with CEO Matt Schruers commending the “decisive response to Canada’s discriminatory tax on U.S. digital exports.”
While the Digital Services Tax Act was signed into law a year ago, its imminent implementation has ignited renewed diplomatic friction, impacting a critical trade relationship where Canada is a major supplier of crude oil, electricity, steel, aluminum, and critical minerals to the U.S.
Disclaimer: This content is aggregated from public sources online. Please verify information independently. If you believe your rights have been infringed, contact us for removal.