President Donald Trump announced on Friday that he was ending trade discussions with Canada due to an upcoming Canadian tax on tech companies, including those from the U.S. In a post on Truth Social, Trump criticized Canada as a challenging trading partner and called the tax on tech firms, set to begin on Monday, a direct attack on the U.S. He stated, “Based on this unjust tax, we are immediately halting all trade talks with Canada. We will inform Canada of the tariffs they will face when doing business with the U.S. within the next seven days.” Canadian Prime Minister Mark Carney’s office did not respond to requests for comment. Last week, Canada’s finance minister affirmed that the digital services tax, affecting tech companies earning over $15 million from Canadian internet users, would proceed as scheduled, despite ongoing U.S. trade negotiations. A tech industry lobbying group estimated the tax, retroactive to 2022, could cost U.S. companies up to $3 billion, with payments due starting on June 30. Trump’s announcement interrupted a period of relatively calm trade updates, which had contributed to market recoveries seen earlier in the year. Initially causing a dip in stock indexes, they later rebounded to reach record highs. Earlier that day, Treasury Secretary Scott Bessent hinted at flexibility regarding trade deal deadlines, with Trump later confirming that the July 9 deadline could be extended or shortened. Canada is a key trade partner for the U.S., subject to various tariffs under agreements like the USMCA. Trump’s administration had imposed tariffs on Canadian goods and materials, impacting industries like steel, aluminum, vehicles, and auto parts.
