Trump Halts Canada Trade Talks Over Tech Tax
Trade Tensions Explode as US President Pulls Plug on Negotiations
President Donald Trump has abruptly cut off all trade negotiations with Canada, sending shockwaves through North America’s economic landscape. The dramatic move, announced late Friday, comes in response to Canada’s decision to slap a new tax on American technology giants—a policy set to take effect as soon as Monday.
Digital Tax Sparks Immediate Backlash
The flashpoint is Canada’s Digital Services Tax, a 3% levy targeting companies making more than $14.6 million annually from Canadian users and over $800 million globally. This means tech behemoths like Google, Amazon, Meta, and Uber will soon be writing checks to Ottawa for revenues dating back to 2022. Trump, never one to mince words, called the tax “a direct and blatant attack on our country,” accusing Canada of copying the European Union’s controversial approach.
Trump’s Tariff Ultimatum: Seven Days and Counting
Not only has Trump slammed the brakes on trade talks, but he’s also promised swift retribution. Within the next week, the US plans to announce new tariffs specifically aimed at Canadian imports. “We will let Canada know the tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump declared on his social media platform.
Businesses Brace for Impact as Markets React
The news sent ripples through financial markets, with the S&P 500 and Nasdaq pulling back from recent highs as investors weighed the potential fallout. Major US tech firms are staring down a collective $2 billion bill, payable to Canada’s tax authorities by the end of the month. Meanwhile, business leaders on both sides of the border are nervously preparing for what could become the most significant US-Canada trade dispute in a decade5.
Canada Holds Firm as Prime Minister Carney Responds
Despite the pressure, Canadian Prime Minister Mark Carney has signaled that his government won’t back down. “We will continue to conduct these complex negotiations in the best interests of Canadians,” Carney said, emphasizing that the digital tax is part of a broader strategy to ensure tech giants pay their fair share8. The standoff comes just weeks after Trump and Carney set a 30-day deadline for trade talks during the G7 summit in Alberta.
**What’s Next for US-Canada Relations?**
All eyes are now on the White House as Trump prepares to unveil his tariff plan by July 4. Analysts warn that if Canada retaliates, the continent could see a repeat of the 2018–2020 trade war, which left billions in tariffs and economic pain in its wake5. With billions at stake and political reputations on the line, the next seven days could redefine North American trade for years to come.
