WASHINGTON — President Donald Trump announced Friday that he is halting trade negotiations with Canada due to its decision to maintain a tax on technology companies, which he described as “a direct and blatant attack on our country.”
In a message on his social media platform, Trump stated that Canada had just confirmed its intent to implement the digital services tax, applicable to both Canadian and international businesses interacting with online users in Canada. This tax is scheduled to begin on Monday.
“Due to this outrageous Tax, we are ceasing ALL Trade talks with Canada, effective immediately. We will inform Canada of the Tariff they will incur for conducting business with the United States within the next week,” Trump wrote in his message.
Canadian Prime Minister Mark Carney said his country would “continue to conduct these complex negotiations in the best interests of Canadians. It’s a negotiation.”
Trump’s announcement was the latest swerve in the trade war he’s launched since taking office for a second term in January. Progress with Canada has been a roller coaster, starting with the U.S. president poking at the nation’s northern neighbor and repeatedly suggesting it would be absorbed as a U.S. state.
Carney visited Trump in May at the White House, where he was polite but firm with Trump. Trump last week traveled to Canada for the G7 summit in Alberta, where Carney said that Canada and the U.S. had set a 30-day deadline for trade talks.
The digital services tax will hit companies including Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2 billion U.S. bill due at the end of the month.
Canada and the U.S. have been discussing easing a series of steep tariffs Trump imposed on goods from America’s neighbor.
The Republican president earlier told reporters that the U.S. was soon preparing to send letters to different countries, informing them of the new tariff rate his administration would impose on them.
Trump has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. He is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.
Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 U.S.-Mexico-Canada Agreement signed during Trump’s first term.
Associated Press writers Will Weissert and Paul Wiseman in Washington and Rob Gillies in Toronto contributed to this report.
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