President Donald Trump announced on Friday (June 27) that the United States is terminating all trade discussions with Canada. This decision follows Canada’s implementation of a digital services tax, which Trump described as “a direct and blatant attack” on the U.S. economy. The tax targets American tech giants like Meta, Google, and Amazon, and is set to be retroactively applied from 2022.
In a Truth Social post, Trump stated, “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.” He also mentioned that Canada would be informed of the new tariff rates they will face within the next seven days. Canada is the top buyer of American goods, importing $349 billion worth last year, while exporting $413 billion to the U.S.
The digital services tax has been a contentious issue in trade negotiations, with Trump labeling it as a “non-tariff trade barrier.” The tax is similar to those implemented by the European Union, which are also under discussion with the U.S. Canadian Prime Minister Mark Carney‘s office is considering its response to the situation.
The termination of trade talks could strain the economic relationship between the two countries, which are major trading partners. The U.S. goods trade with Canada totaled approximately $762 billion last year.
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