US President Donald Trump has announced on his Truth Social platform that the US was “terminating” trade talks with Canada over its new digital services tax on American tech companies, including Apple, Meta, Google, and Amazon.
Calling Canada “a very difficult country to trade with”, Trump said the move is a “direct and blatant attack on our country” and announced plans to inform Canada of the tariffs it will pay to do business with the US within the next seven days.
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“They were foolish to do it,” he continued, at an unrelated news conference Friday. “So I said, we’re going to stop all negotiations with Canada right now until they straighten out their act.”
Canada’s 3% digital services tax will cost American tech giants, which earn over $20 million in revenue, such as Amazon, Apple, and Google, more than $2bn a year, according to business groups’ estimates.
The tax will apply to revenue that tech firms earn from online marketplaces, social media services, and data sales involving Canadian users. The first payments are due on Monday.
Speaking to reporters at the White House, Trump said trade negotiations would not resume “until they straighten out their act,” adding that the US holds “such power over Canada.”
Canadian officials were allegedly planning to address the issue during trade talks with the US. However, Trump’s response puts the future deal in question, despite a more cordial relationship between the countries after the election of Mark Carney as Canadian prime minister in March.
“We have a great relationship with the people of Canada,” Trump told journalists in the Oval Office on Friday afternoon, although adding: “We have all the cards, every single one. We don’t want to do anything bad but economically we have such power over Canada.”
Trump commonly uses social media to gain leverage in negotiations or speed up stalled talks, according to the BBC, which cited Trump’s threats to ramp up tariffs on goods arriving to US shores from the EU.
In April, the US president imposed a whopping 145% tariff on certain Chinese goods.
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