US President Donald Trump announced the immediate termination of all trade discussions with Canada, citing an “egregious tax” as the reason. The move signals a sharp escalation in trade tensions, with Trump vowing to reveal new tariffs for Canada that they will pay to conduct business with the U.S. within the next seven days.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump wrote. He further warned that the U.S. would reveal the specific tariffs Canada would face for doing business with the United States within the next seven days.
Canada’s digital services tax, set to impact major U.S. technology companies such as Amazon, Google, Meta, Uber, and Airbnb, imposes a 3% levy on revenue generated from Canadian users. Crucially, the tax will apply retroactively to January 1, 2022, potentially leaving American firms with an estimated $2 billion USD bill due by the end of June.
This move by President Trump marks a significant setback in ongoing efforts to ease existing steep tariffs that his administration had previously imposed on various Canadian goods. The President also indicated that his administration is preparing to notify other countries of impending new tariff rates. The Canadian government has yet to issue an official response to the President’s latest announcement.
(With Reuters Inputs)