Trump declares termination of trade talks with Canada
Trade Talks Collapse: Trump Slams Canadian Digital Tax onClick="clearHighlight()">📝
In a fiery tweet on Friday afternoon, former President Donald Trump declared an end to trade negotiations with Canada, labeling them as a "joyless business venture." His statement came in response to Canada's digital services tax on American tech giants, which he deems as an unjustified aggression against the U.S.
Trump threatens to impose tariffs on Canada within the next seven days, pulling no punches in his critiques of this Canadian tax on digital services. According to Trump, the tax is a blatant attack on American enterprises and a plagiaristic effort of the European Union, which is embroiled in similar disputes with the U.S. over digital taxation.
The controversial digital tax, set at 3%, targets companies that generate an annual global turnover of over $1.1 billion and have Canadian revenues exceeding $20 million.[1] It is set to take effect retroactively from 2022, potentially costing American companies up to $2 billion by the end of the month.
Calls for Elimination
In recent weeks, numerous organizations and industry representatives, including the Canadian Chamber of Commerce, have advocated for the elimination or suspension of the digital services tax out of fear of escalating American retaliation.
The Escalating Trade War
This latest development represents another turn in the ongoing trade war that began in March 2025, when Trump imposed tariffs on Canada and Mexico due to border security concerns and excessive fentanyl imports.[2] Canada responded with retaliatory tariffs against various sensitive U.S. industries, intensifying the feud between the two nations.[2]
Canada, however, remains under the knife of other U.S. tariffs, particularly on aluminum, steel, and goods that do not comply with the Canada-United States-Mexico Agreement (CUSMA).[1]
Despite a tentative agreement reached at the G7 Summit in Kananaskis mid-June, Trump's announcement now threatens the prospect of any trade resolution within the stipulated timeframe.[1]
Tariff Threats Mount
Following Trump's announcement, industry leaders and representatives confirm that the Canadian government has been somewhat secretive in its negotiations, asking them to determine the level of financial impact they can absorb from potential tariffs.[1]
In light of the escalating trade tension, Canadian Prime Minister Justin Trudeau must navigate these complex negotiations delicately, ensuring the well-being of both the country's workers and businesses.
Political Backlash
Conservative leader Pierre Poilievre has expressed disappointment for the sudden halt in trade negotiations, suggesting alternative measures to revitalize Canada's economy, including the abolition of the industrial carbon tax and reducing greenhouse gas emissions caps.[1]
On the other hand, Yves-François Blanchet, the leader of the Bloc Québécois, accuses Trudeau of neglecting the trade matter since the election and failing to lift the tariffs, despite his promise at the G7.[1]
[1] Reuters. (2025). Trump vows new tariffs on Canada after trade talks collapse.[2] Washington Post. (2025). Trump shares tariff wish list with Rubio, other lawmakers.[3] CBC News. (2025). Trump targets Canada's digital tax in trade dispute.[4] BBC News. (2025). US to hit Canada with fresh tariffs over digital tax.[5] Financial Post. (2025). Summary: What the digital services tax means for Canada-U.S. Trade.
The Canadian digital services tax, a controversial measure targeting American tech giants, has sparked a heated response from former President Donald Trump, as he view it as a copycat attempt by the European Union and an attack on U.S. enterprises. Referencing the dispute within French-language political discussions, Pierre Poilievre, the leader of the Conservative party, has proposed alternative economic solutions, including the abolition of the industrial carbon tax and easing greenhouse gas emissions caps.
