President Donald Trump said on Friday, June 27, that he is calling off trade negotiations with Canada in retaliation for taxes impacting US tech firms, adding that Ottawa will learn of their new tariff rate within a week.
Trump was referring to Canada's digital services tax, which was enacted last year and forecast to bring in Can$5.9 billion (US4.2 billion) over five years. While the measure is not new, US service providers will be "on the hook for a multi-billion dollar payment in Canada" come June 30, noted the Computer & Communications Industry Association recently.
The 3% tax applies to large or multinational companies such as Alphabet, Amazon and Meta that provide digital services to Canadians, and Washington has previously requested dispute settlement talks over the matter.
"Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said in a post on his Truth Social platform Friday. He called the country "very difficult" to trade with.
Canada may have been spared some of Trump's most sweeping duties, such as a 10% levy on nearly all US trading partners, but it faces a separate tariff regime. Trump has also imposed steep levies on imports of steel, aluminum and autos.
Last week, Canadian Prime Minister Mark Carney said Ottawa will adjust its 25% counter tariffs on US steel and aluminum − in response to a doubling of US levies on the metals to 50% − if a bilateral trade deal was not reached in 30 days. "We will continue to conduct these complex negotiations in the best interest of Canadians," Carney said Friday, adding that he had not spoken to Trump following the US president's announcement.