United States-Canada Trade Negotiations Collapse Following Canada's Imposition of Digital Services Tax on America
In a bold move, President Trump yanked the plug on trade talks with our northern neighbors, Canada, on Friday. This decision, triggered by Canada implementing a digital services tax on U.S. tech giants like Meta, Meta, and Google, has put a hard stop on ongoing trade negotiations between the two countries.
Trump beefed up his frustration, labeling the Canadian digital services tax as a blatant attack against America. The Canadian tax comes into effect from Monday and applies to tech companies generating over 14 million USD annually from users in the country, according to Bloomberg News. Trump threatens to slap tariffs on Canadian goods imported to the U.S. and will announce the specifics in the coming seven days.
On Truth Social, Trump emphasized, "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately." The Canadian digital services tax boomerangs back to revenues earned as far back as 2022.
Tensions between the two countries have been festering since Trump took office for the second time in January. Trump's aggressive tactics lead us to where we are today. Before his second term, Trump threatened to annex Canada, dubbing it America's 51st state. Relations have soured so much that they've reached the boiling point now.
In April, Trump imposed tariffs on all global imports, slapping at least 10% on goods from every nation around the world. Despite months of negotiations, no significant trade deals have been inked with key trading partners like China and the UK yet. Negotiations with India are nearing the finish line, but talks have been stagnant for weeks.
Trump had previously promised 90 deals in 90 days, a promise that hasn't materialized. The "Big Beautiful Bill," a massive tax cut for the wealthiest Americans, is still waiting for Trump's signature post-July 4th. Trump remains optimistic about the bill's successful passage but expressed his frustration with the slow progress on economic policy at home.
On Truth Social, Trump urged Republicans to push the bill forward, "The House of Representatives must be ready to send it to my desk before July 4th. We can get it done. It will be a wonderful Celebration for our Country, which is right now, 'The Hottest Country anywhere in the World'".
[1] https://www.bloomberg.com/news/articles/2025-06-25/trump-to-trade-canada-in-retaliation-for-digital-services-tax[2] https://www.cnn.com/2025/06/25/politics/trump-canada-trade-tariffs/index.html[3] https://www.wsj.com/articles/trump-to-terminate-trade-talks-with-canada-over-digital-tax-11624718068
"President Trump, in response to Canada's digital services tax, has threatened to slap tariffs on Canadian goods and terminated all trade discussions with Canada, citing this tax as a direct attack on America. In a post on Truth Social, Trump made these announcements, emphasizing that these actions will take effect immediately."
"Amidst the escalating tensions between the two countries, Trump's policy-and-legislation strategy includes threatening tariffs as a response to global economic policies, such as the digital services tax in Canada. These activities, including his aggressive tactics in politics and general news, have significantly impacted the US-Canada relationship."
